NASAA to address advisor use of client account logins

By Staff | July 27, 2017 | Last updated on July 27, 2017
1 min read

The North American Securities Administrators Association is seeking public comment on a proposed amendment to its model rule on unethical business practices of investment advisors.

The proposal is aimed at U.S. advisers who access client accounts with the client’s own unique identifying information — such as a username and password — as opposed to using the adviser’s own, separate login, NASAA said in a notice Tuesday.

Many advisers need access to different client retirement accounts, brokerage accounts, and other online accounts, and some advisers accept or specifically ask clients for their usernames and passwords to access the accounts, NASAA says.

A NASAA release says: “When an investment adviser accesses a client’s account in this manner, the investment adviser is in effect impersonating this client and has the same access to the account as the client. There are multiple concerns with this type of access, including but not limited to custody and recordkeeping obligations as well as violations of the clients’ own user agreements and fraud protection policies with the online companies.”

The regulator is proposing to prohibit such impersonation, and asks for comments by end of day, August 25, 2017.

Read the full notice here.

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The staff of have been covering news for financial advisors since 1998.