Opposition to Adviser Oversight Proposal Gains Big Supporter

According to an article in InvestmentNews, Schwab Advisor Services will join other financial services firms next week to protest the  Investment Adviser Oversight Act, a proposed bill which would authorize the creation of one or more self-regulatory associations (SROs) for RIAs.  In addressing the matter, Bernie Clark, executive vice president at Schwab Advisor Services, said that RIAs are best regulated through the SEC’s principles-based regulation as opposed to the rules-based SRO approach.

Earlier this week, the Project on Government Oversight (POGO), a government reform group, sent a letter to members of the House Financial Services Committee urging it to reject the proposed legislation.  The group was highly critical of FINRA’s inherent conflict of mission, lack of transparency and accountability, and excessive expenditures, such as executive pay packages and lobbying efforts.  The POGO letter noted that FINRA’s top 10 executives received nearly $13 million in pay and benefits in 2010.  In an email statement, FINRA responded that “POGO’s position is not an acceptable or realistic response to the critical need to fill an untenable gap in investor protection in the investment adviser space.”

Leave a Reply