Financial Planning Coalition Urges Congress To Reconsider SRO For Advisors

Wednesday, September 14, 2011 07:37
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Financial Planning Coalition Urges Congress To Reconsider SRO For Advisors

The Financial Planning Coalition wasn't invited to send a representative to Congress to argue against moving advisors to a self-regulatory structure, but they sent a statement anyway for the record.

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The group -- an umbrella for NAPFA, the FPA, and the CFP Board -- agrees with those who say RIAs need stricter and more frequent examinations. 

 

But they say moving directly to an SRO is drastic in the absence of cost-benefit analysis, especially given evidence that FINRA isn't exactly perfect either, much less a perfect fit for advisory firms.

 

It's nice that they're engaged in the issue. However, they still seem more interested in expanding the fiduciary standard than they are in answering the question of who will regulate their members.

 

The SRO issue doesn't even come up until page 9 of their 14-page statement.

 

Once again, Barbara Roper of the Consumer Federation of America is the one suggesting alternative solutions. In her testimony, she returned to the alternatives laid out by the SEC itself.

 

Maybe RIAs could simply pay added fees to the SEC in order to fund a tighter exam regimen.

 

Or maybe FINRA could simply take over full regulation of all "dual-registered" or hybrid advisors and ease the SEC's burden that way. 

 

These proposals might not satisfy those who think the SEC has already wrecked its reputation, but as yet there's not much else on the table short of full SRO membership for all advisors.

 

 

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