In-depth audits by SEC making RIAs dig deep; Code of ethics, fuller explanations likely to raise compliance costs.(News)

Byline: Bruce Kelly NEW YORK - Recent letters forewarning audits indicate the Securities and Exchange Commission is further toughening its stance on registered investment advisers. A letter the SEC sent to one RIA tells the firm it must provide information that reveals its "tone at the top'' while stressing its "overall commitment to establish and maintain an effective system of controls and compliance procedures.'' The firm is also required to demonstrate "the specific risk management, control and compliance processes and procedures'' in performing a number of objectives.

Those include a variety of areas, from how decisions are made on investment portfolios to meet investors' goals and risk tolerance to demonstrating accurate record keeping....

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