In a statement, the Financial Planning Coalition, a collaboration of the Certified Financial Planner Board of Standards (CFP Board), the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA), said that while it agreed with Rep Bachus that “better oversight of investment advisers is needed, we oppose the legislation introduced in the House of Representatives”.
The FPC added: “As a recent Boston Consulting Group study found, outsourcing SEC oversight to a new SRO [self-regulatory organisation] would be twice as expensive as directing adequate resources to the current SEC oversight programme.
“Building on the SEC’s existing infrastructure and experience is a better option than creating an added layer of regulation, and could be accomplished more quickly and effectively, and at far less cost.
“Creating an SRO for investment advisers would unnecessarily burden small business owners with additional costs.
“Investment advisers are overwhelmingly opposed to a FINRA SRO. More than 80% of advisers surveyed said they would prefer continued SEC oversight to being regulated by FINRA [Financial Industry Regulatory Authority], an SRO for broker-dealers.
“We look forward to working with chairman [Bachus] and others to find an effective way to address the oversight issue without unduly burdening investment advisers.”
As reported, US lawmakers on Wednesday unveiled new legislation aimed at boosting the standards of advice on offer from America’s advisory industry, in response to a 2011 SEC study that found the SEC lacked the resources to adequately examine America’s nearly 12,000 registered financial advisers.
