Scheduled Congressional Testimony Strongly Tilted Toward An RIA SRO

Sunday, September 11, 2011 23:44
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Scheduled Congressional Testimony Strongly Tilted Toward An RIA SRO

The House Financial Services Committee has finally announced the panelists for Wednesday's hearing on advisor regulation. The list is not friendly to those who would rather remain under SEC oversight.

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Out of eight scheduled witnesses, only one -- David Tittsworth, head of the Investment Adviser Association -- is likely to advocate keeping the SEC as registered investment advisors' regulator.

 

Bill Dwyer of the Financial Services Institute, a trade group for independent broker-dealer firms, is probably going to pitch for RIAs to shift to a self-regulatory organizational (SRO) framework.

 

After all, the RIA reps he works with tend to be dual-registered and so are already overseen by FINRA anyway. Moving the advisory side of their regulatory duties from the SEC would only simplify their compliance environment -- while it would complicate life for pure RIA firms.

 

Terry Headley of the National Association of Insurance and Financial Advisors will probably also lobby to move RIA oversight to FINRA and argue against the universal fiduciary standard while he's at it.

 

Ken Erhinger of the Association for Advanced Life Underwriting is a bit of a wild card, but his insurance background makes him a natural NAIFA ally.

 

John Taft of the wirehouse-driven Securities Industry and Financial Markets Association has espoused similar goals in the past.

 

Rick Ketchum of FINRA's view is clear. He'd love to absorb RIAs into his current responsibilities.

 

And consumer advocate Barbara Roper has already conceded that an SRO for RIAs is almost a done deal. She'll probably argue passionately about the fiduciary standard, but sees the SRO as a lost cause.

 

Is it just a matter of not enough RIA-only groups with the clout to get on this panel?

 

Advisors who feel strongly about this issue still have a little time to write their representatives with an explanation of why SEC oversight is good for investors, but not much.

 

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