California lawmakers are moving ahead with efforts to reclassify all independent contractors in the state, but the IBD-friendly Financial Services Institute says it's a mistake.
The FSI had earlier called on California-based members to write their state legislators against SB 459, which would force broker-dealers to issue and archive extra paperwork that confirms that yes, independent advisors are independent contractors.
In a longer letter of comment, the FSI points out that it's pretty obvious that IBD affiliates are independent and that existing disclosure should do the trick.
Forcing advisors and firms to maintain extra documentation to that effect is "wasteful and unnecessary," the group argues.
While it might not cost California or advisors much -- maybe $250,000 a year total for the state -- it seems to be the principle of the thing.
Interesting detail: a full 1/7 of all FSI independent members live in California.