The investment adviser was essentially dead in the water as far as the finding of a compliance violation goes because it failed to follow its own procedures.

Leaving that aside, the question of whether wrap fee accounts are worthwhile for clients is more complicated than how many times the client trades. As the enforcement action notes, the services of a broker-dealer and an investment adviser are somewhat different: The adviser has the task of monitoring the client's account on an…

Should one be needed, this enforcement action is a reminder that the definition of "custody" under the Advisers Act extends well beyond physical possession of customers' assets.

Firms that provide services to municipalities should be mindful that the definition of "municipal advisor" does not correspond to the definition of "investment adviser," and that it is not intuitive.

Given the inherent indeterminacy of ESG, it would not be surprising to see wide discrepancies between the methods of the firms. In the absence of transparency as to how the firms determine their ESG scores, investors who invest based on their views as to what is "right" are essentially outsourcing their moral judgements to third party providers. (See also ".")