Business Professor Urges Third-Party Audits Instead Of An SRO For Advisors

Friday, October 28, 2011 07:15
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Business Professor Urges Third-Party Audits Instead Of An SRO For Advisors

Tags: FINRA

A Georgetown University professor is arguing that setting up a self-regulatory organization for advisors would be difficult and expensive, so advisors should simply find accountants to audit their records.

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James Angel is about to release a new paper on advisor supervision. It might even be on his site by the time you read this.

 

He's a noted expert on market regulation.

 

The new research, sponsored by a grant from TD Ameritrade, reportedly points out that any SRO for advisors would ultimately look like FINRA and require significant SEC oversight.

 

Even if Congress decides to simply hand advisors to FINRA, he suspects the organization would need to raise about $200 million to fund the new operation -- about $720 per advisory rep in the industry.

 

He suggests letting RIAs have accountants or even colleague firms verify that everything on their Form ADV is correct.

 

It's a brilliant idea. Since TD Ameritrade is involved, it might get to the attention of Congress. 

 

And advisor letters can't hurt. The people to write to are here.

 

 

 

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