The Financial Services Institute Inc. is now clamoring for a self-regulatory organization to oversee investment advisers.
“FSI supports a self-funded industry-informed regulator for investment advisers,” FSI general counsel and director of government affairs David Bellaire said in an interview last week. “We believe that should be a separate entity” from the Securities and Exchange Commission, though the adviser SRO should be supervised by the SEC, he said.
Mr. Bellaire, whose organization represents about 120 broker-dealers, stopped short of endorsing the Financial Industry Regulatory Authority Inc. as the SRO for advisers, as has been suggested by some in recent months. “No one's really laid out a plan for how they would take on that role,” he said.
Advisers' groups strongly oppose setting up a separate SRO, fearing that Finra would become their regulator. They argue that Finra is better suited to regulate the brokerage industry, which comes under different regulations than investment advisory firms.
The Financial Planning Coalition, which comprises the Certified Financial Planner Board of Standards Inc., the Financial Planning Association and the National Association of Personal Financial Advisors, has called for creating a separate professional regulatory organization to oversee financial planners and financial planning.
About 120 representatives of dually registered broker-dealers and investment advisers represented by the FSI lobbied members of Congress during a recent Washington meeting on the SRO issue, Mr. Bellaire said.
Draft legislation released Oct. 1 by Rep. Paul Kanjorski, D-Pa., chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, calls for imposing new fees on investment advisory firms to cover the cost of SEC inspections. The FSI opposes that, Mr. Bellaire said.
“The SEC's got too much on their plate. What we need is a separate, distinct entity that can focus on investment adviser supervision, exams and enforcement,” Mr. Bellaire said.
E-mail Sara Hansard at [email protected].
