Washington INsider

Washington INsiderblog

Mark Schoeff Jr. looks at what's really happening on Capitol Hill - and the upshot for advisers.

Adviser issues lack Madoff moment

Advocacy organizations engage in lawmaker 'education'

Mar 1, 2013 @ 12:54 pm

By Mark Schoeff Jr.

Earlier this week, the House Financial Services Committee released its hearing schedule for the first part of March. It is replete with sessions revolving around housing, monetary policy and “too big to fail.”

The roster underscores that adviser issues are buried under higher-profile or more urgent topics. What the adviser area lacks is “Madoff moment” that would catalyze congressional activity on investor protection.

It's a good thing, of course, that we haven't had a major client ripoff recently of the magnitude of the Ponzi schemes perpetrated by Bernard Madoff or R. Allen Stanford. But it usually takes a crisis to focus the attention of lawmakers.

This situation creates a challenge for adviser advocates on Capitol Hill. What do you do when no one is paying attention?

“When there isn't an immediate crisis or scandal, it remains important for organizations like ours to keep the issues of investor protection front-and-center before members of Congress and to continue to seek reforms in these areas,” said Marilyn Mohrman-Gillis, managing director of public policy and communications at the Certified Financial Planner Board of Standards Inc.

The CFP Board, the National Association of Personal Financial Advisors and the Financial Planning Association comprise the Financial Planning Coalition. It was formed in 2009, during the heart of the financial crisis, when investor protection was a priority.

Now that the issue is an afterthought, does FPC move to the sideline? Not exactly. It just plays a more subtle game.

“We can't step back just because it's not a top-of-mind issue,” said Karen Nystrom, NAPFA manager of public policy and advocacy. “It's our job to keep it top-of –mind. While there is nothing immediate [happening] and we have time, it's a good time to get [lawmakers] up to speed. It's a great time for education.”

That is the tack that the Investment Adviser Association took this week. Ten members of the group's board of governors conducted 18 Capitol Hill meetings with lawmakers and their staffs on Tuesday, according to Neil Simon, IAA vice president for government relations.

Sitting down without the agenda revolving around a piece of legislation offers some advantages.

“Often times, the conversation can be more wide ranging and in-depth,” Mr. Simon said.

For instance, the IAA representatives talked about the regulation of their profession – an obscure topic for many members of Congress.

“We stressed the importance of maintaining SEC primacy in this area – and steps that can be taken to strengthen its oversight,” Mr. Simon said.

The advisers made the same point that SEC leaders do about the agency's budget – that it is funded by fees collected from financial market participants rather than tax dollars.

Just before the State of the Union address last month, the FPC issued a statement calling for “the enhancement of the [SEC's] existing oversight program.”

Generating support for that idea in a House dominated by Republicans skeptical of the SEC's efficacy will require a lot of educational sit-downs with lawmakers.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Advisers beware: tax law has unintended consequences

Commission accounts could be preferable for some clients, and advisers could be incentivized to move from employee broker-dealers to independent channels.

Recommended Video

Path to growth

Latest news & opinion

Cutting through the red tape of adviser regulation is tricky

Don't expect a simple rollback of rules under the Trump administration in 2018 — instead, regulators are on pace to bolster financial adviser oversight.

Bond investors have more to worry about than a government shutdown

Inflation worries, international rates pushing Treasuries yields higher.

Morgan Stanley reports a loss of advisers after exiting the protocol for broker recruiting

The firm said it lost 47 brokers in the fourth quarter, the most in any quarter of 2017.

Morgan Stanley's wealth management fees climb to all-time high

Improvement reflect firm's shift of more clients into fee-based accounts priced on asset levels, which boosts results as markets rise.

Relying on trainees, Merrill Lynch boosts adviser headcount in 2017

Questions remain about long-term effectiveness of wirehouse's move away from recruiting experienced brokers.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print