June 07, 2012
bill is crucial to protect middle-class Americans who need the services of a
financial adviser, the president of the Financial Services Institute (FSI) told
show its support for the bipartisan Investment Adviser Oversight Act of 2012, Dale
Brown, chief executive and president of the FSI, testified before Congress
Wednesday and urged the Committee on House Financial Services to approve it.
bill, co-authored by Rep. Spencer Bachus (R-Ala.), chairman of the committee,
and Rep. Carolyn McCarthy (D-N.Y.) calls for a self-regulatory organization
(SRO) to oversee financial advisers. (See “Bipartisan
Bill Seeks Expanded Oversight of Advisers.”)
regulatory structure for financial advisers “a critical component to building
and maintaining the trust of American savers and investors,” FSI said the bill
should be approved to protect Americans who need investment advice. Advisers
are now overseen by the Securities and Exchange Commission (SEC).
bill would shift responsibility for adviser examinations from the SEC to an
independent regulator paid for by the industry, freeing the commission to
regulate the regulator, as it has done for decades for the brokerage and
municipal securities industries, among others, Brown pointed out.
middle-class family that wants professional help with investing their kids’
college fund has no real way of knowing if someone is checking up on their
investment adviser,” Brown noted. “[The Financial
Industry Regulatory Authority] FINRA might have audited
their adviser in the last two to three years. Or that adviser might not have seen an SEC examiner since 1999—if at all.
American investors should not have to be regulatory experts to know whether
they are being protected.”