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Top Finra spokesman leaving agency

Schloss giving up million-dollar job in September; face of the SRO

A Finra official who often was the public face of the agency’s effort to expand its scope to include oversight of investment advisers is leaving the organization.

Howard Schloss, executive vice president for corporate communications at the Financial Industry Regulatory Authority Inc., will depart in September.

“Howard submitted his resignation to me in March, and shortly thereafter, it was communicated to Finra staff,” Finra chairman and chief executive Rick Ketchum said in a statement. “I asked him to stay on through the end of the summer to help ensure a smooth transition, and Howard was kind enough to agree. I thank him for his years of dedicated service.”

Other than Mr. Ketchum, Mr. Schloss was usually the Finra official who spoke on the record about the agency’s support of legislation in Congress that would authorize one or more SROs for advisers.

The bill doesn’t explicitly mention Finra, but the agency has spent hundreds of thousands of dollars lobbying Congress and consistently argues in hearings that it is well-positioned to be the adviser SRO.

The measure, written by House Financial Services Committee Chairman Spencer Bachus, R-Ala., seeks to increase significantly the number of adviser exams that are performed each year by augmenting Securities and Exchange Commission oversight of advisers. In a report to Congress, the SEC said it lacked the resources to review annually more than about 8% of the approximately 12,000 registered advisers in 2011.

Investment adviser organizations are adamantly opposed to Mr. Bachus’ bill and fiercely resist Finra oversight. They say that the SEC should remain the adviser regulator and be allowed to charge a user fee to fund adviser exams.

Among the criticisms adviser advocates level at Finra is that the organization pays exorbitant executive salaries. Mr. Schloss made more than $1 million in 2011, according to a Finra report. Finra counters that it sets a compensation level that allows it to attract talent from the financial industry.