Would added SRO regulatory costs put you out of business?

Jun 10, 2012 @ 12:01 am

A recent blog post by InvestmentNews Washington reporter Mark Schoeff Jr. about a survey in Massachusetts on the possible impact of proposed federal legislation to create a self-regulatory organization for registered investment advisers drew strong responses from online readers.

The Massachusetts Securities Division, which conducted the survey, said that 41% of the approximately 325 advisers who participated in the poll indicated that the bill likely would put them out of business. Their primary objection was the added regulatory costs that they feared such an SRO would foist on them.

“This will likely also apply to most other states. This is your Republican Bachus hard at work to put even more small businesses out of work. Congratulations! So while the big cheeses like Romney don't pay taxes of any significance, and I already pay at least double, percentagewise, what he pays, Republicans now want to attack my small business to boot! Just wrong!”

— CA Adviser

“CA Adviser: The Bachus bill is co-sponsored by a Democrat, Rep. Carolyn McCarthy of New York. As for Romney's tax situation, take some time to understand why he pays what he pays and how many of your clients hopefully benefit from long-term capital gains treatment.”

— NoLonger7Registered

“Unelected bureaucrats do not care which party is in office. Elected bureaucrats — senators and representatives protecting their right of office at both the state and national level — want to demonstrate their activeness. How? More regulations, whose stated purpose is to "protect' the public. Who protects us from them? Yes, vote out the elected elite, fire the unelected elite and remember that people will continue to make themselves important, regardless of the parties. Elect new senators and representatives continuously, and only when they agree to actually represent their electorate!”

— Anthony_Campbell

“This is not a partisan issue. NASAA wants to maintain its controls, Finra needs additional funding, and the SEC can't get enough funding from Congress to do the job. It appears the better solution would include combinations of all. NASAA covers all firms up to some size — say, $50 million AUM; Finra covers dual-registered firms and firms from $50 million to $5 billion; and the SEC covers firms with over $5 billion. (These are arbitrary, but the GAO could make independent recommendations that might make more sense.)”

— Douglas_Schriner

“Anyone have a source for exactly how much an RIA firm under $30 million would have to pay Finra for regulation?”

— MiddletonAdvisoryDLM

“Why not start by pulling out of the SEC and Finra those who were in a position of authority while these organizations ignored the signs Madoff was playing dirty — turning their heads or a blind eye? Isn't that what all the Anti-Money-Laundering Act and the U.S. Patriot Act compliance mandates dictate? Were these officials incompetent or corrupt? Did their blind eye and neglect not enable the fleecing of investors? When will they pay the price for their neglect and irresponsible behavior? Until these people are removed, and new ones appointed, there's plenty of mistrust and suspicion to go around.”


“Just as I have always said, put it to a vote! And let's vote out of office all politicians that want to impose this burden upon RIA firms with less than five employees!”

— Old Sal

“The following is information on Finra's operation: no accountability, no transparency and lots of crooks on their boards, including Bernie Madoff, who was vice chairman in 1994 when he was running his Ponzi operation. His son, Mark, was also on board on the National Adjudicatory Council ... Bernie's niece, Shana Madoff, a compliance officer for Bernie's firm, was a member of the compliance advisory committee for Finra. Let the SEC do the job, as well as the states for small RIAs. Otherwise, many of us are getting out. Who will take care of our clients then?”

— Michael_Babin


What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Oct 17


Best Practices Workshop

For the fifth year, InvestmentNews will host the Best Practices Workshop & Awards, bringing together the industry’s top-performing and most influential firms in one room for a full-day. This exclusive workshop and awards program for the... Learn more

Featured video


Ron Carson explains the origins of 'Ronsense'

To take his message to the masses, Ron Carson has launched a "Ronsense," a web series on Twitter that features some of his pearls of wisdom. Learn about how it all started.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

Finra ranking brokers in effort to crack down on industry's bad apples

All 634.403 reps have been ranked based on factors such as prior regulatory disclosures, disciplinary actions and employment history.

How to save retirement planning from tax reform

Losing big deductions, even in lieu of a larger standard deduction, may cause taxes to rise in retirement.

Advice firms in a tricky financial position

As revenue growth dips and salaries rise, nearly 90% of firms are at or near capacity.

In a turnaround, Wells Fargo Advisors sees slight bump in headcount

Racked by a scandal in its retail banking unit, Wells still managed to add 37 new advisers in the third quarter, a small number but an improvement nonetheless.

Social Security benefits to increase by 2% in 2018

Largest cost-of-living adjustment since 2012 may be offset for some by higher Medicare premiums.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print