fi360 Responds to Draft Bill on Regulating Investment Advisers

-- Leading fiduciary firm opposes proposal for one or more self-regulatory organizations --

Sep 12, 2011, 14:30 ET from fi360

PITTSBURGH, Sept. 12, 2011 /PRNewswire/ -- Fiduciary360 (fi360), the leading organization for fiduciary education, today came out in opposition to House Financial Services Committee Chairman Spencer Bachus' (R-AL) discussion draft of a bill to enhance examinations of Registered Investment Advisers (RIAs). After carefully reviewing the text of the draft, which proposes to authorize one or more self-regulatory organizations (SROs) for adviser oversight, fi360 believes that the Securities and Exchange Commission (SEC) should be the sole body responsible for RIA oversight.

"If there is any bright spot in this bill, it's that the proposed bill calls for more than one SRO, rather than just FINRA as the sole regulator," said Blaine Aikin, fi360's President & CEO. "However, we still believe that fully funding the SEC with enough resources to oversee the industry is the correct direction."

Fi360 is concerned that Congressional leaders have failed to consider the costs and benefits of such action to investors and small advisers. "A new bureaucracy will increase costs for the vast majority of investment advisers, forcing them to pass on higher costs to consumers and leaving investors with potentially fewer choices in advisory services. Given that the Dodd-Frank-Act-mandated study recommended SEC self-funding, it's unclear why the proposed bill focuses on an SRO option," said the company in a recent statement.

"This proposal creates a new bureaucracy to accomplish what the SEC could handle directly," said Duane Thompson, Senior Policy Advisor for fi360. "The only thing the SEC currently lacks to increase the effectiveness of exams is the resources that self-funding would provide."

Fi360 also notes that if the bill does come to pass, it will be imperative that an alternative to FINRA be authorized as a means to preserving high fiduciary standards for advisory services. Fi360 is working with the recently formed Self-Regulatory Organization for Independent Investment Advisers (SROIIA) to be prepared for that possibility. SROIIA is positioning itself to be the regulator of choice for advisers who are willing to be held accountable to the bona fide fiduciary standard and fi360 has agreed to provide a fiduciary exam required for SROIIA membership.

About fi360

Fi360 offers a comprehensive approach to investment fiduciary education, practice management and support that has established them as the go-to source for investment fiduciary insights. With substantiated Practices as the foundation, fi360 offers world-class fiduciary Training/Education, Tools and Resources that are essential for fiduciaries and those who provide services to fiduciaries to effectively and successfully manage their roles and responsibilities. Fi360 assists those who rely on their fiduciary education programs, professional AIF® and AIFA® designations, Web-based analytical and reporting software and resources to achieve success. For more information about fi360, please visit or Twitter: @fiduciary360.

SOURCE fi360