The march of progress can change some things forever. But in the financial services field, some things are just cyclical.

In that context, the SEC staff recently put out a “risk alert” targeting the private fund industry. You can read it here: “Observations from Examinations of Investment Advisers Managing Private Funds.” The alert identifies a number of deficiencies cropping up in the private fund industry. Meanwhile, the SEC is also adding senior personnel with exceptional knowledge of the business. Many have been asking what this all means. The answer is: look at the big picture.

The deficiencies enumerated in the recent alert aren’t new. They have all been highlighted before, if not in the private fund context, then certainly in context of mutual funds and separate accounts. And, they’re mostly common sense to any firm that makes thoughtful decisions based on putting investors first – some call that fiduciary duty. Meanwhile, the SEC adding senior personnel with private fund expertise should be viewed as a related event, not a coincidence. So one of the big picture messages is: “Stop the backsliding on legal and compliance.”

Up Next: Getting the Message Out.