Ketchum says Finra is backing off adviser oversight: Report

Regulator's CEO says chances of success are thin but agrees that adviser oversight needs improvement

Apr 10, 2014 @ 11:12 am

finra, sec, advisers, ria, brokers, ketchum
+ Zoom
Richard Ketchum (Bloomberg News)

Finra chairman and chief executive officer Richard G. Ketchum said the regulator is no longer interested in expanding its oversight to financial advisers.

"We've have done the Sisyphus climb" to be given authority over investment advisers, Mr. Ketchum told The Wall Street Journal Thursday. "We are not pursuing it at the present time."

Currently, the Financial Industry Regulatory Authority Inc. oversees brokers while the Securities and Exchange Commission regulates registered investment advisers.

"We don't perceive any likelihood that it would be successful," Mr. Ketchum told the newspaper, referring to the regulator's efforts, which began in 2012 when it made a strong push for congressional approval of a bill that would shift financial adviser oversight.

(See also: Investment adviser lobbyist: Finra will renew effort to become adviser SRO)

Advisers resisted the legislation, fearing that Finra, an industry-funded regulator, would fill the role and the measure died. Finra backed down when the new Congress convened last year and the champion of the SRO bill, Rep. Spencer Bachus, R-Ala., relinquished his seat as chairman of the House Financial Services Committee.

Mr. Ketchum reiterated the regulator's belief that adviser oversight should be increased, telling the newspaper that Congress should provide the SEC with the resources necessary to increase adviser examinations. The SEC examines about 8% of the nearly 11,000 registered investment advisers each year.

Mr. Ketchum told the newspaper that such light oversight "creates issues from the standpoint of everything from classic Ponzi schemes to abuse."

Over the past two years, Finra has maintained that it wasn't mounting a lobbying campaign to become the adviser SRO and didn't engaged in talks with the House or Senate.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

Carson Group's West: Family feud financial dynamics

Finding (and retaining) wealthy families to manage their wealth can be challenging. Carson Group's Paul West explains the secret to family success - and how can you keep them as clients for generations.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

T. Rowe Price steps up its game to serve financial advisers

The Baltimore-based mutual fund giant is more aggressively targeting financial advisers with a beefed-up wholesale crew and placement on custodial platforms.

The most important tax changes for 2018

The Internal Revenue Service issued inflation adjustments to more than 50 tax provisions for 2018.

E*Trade acquiring custodian Trust Company of America

Discount broker buying second-tier custodian for $275 million.

Another thousand Dow points higher, and investors yawn

Market milestones keep falling like dominoes, with 51 records broken so far this year.

LPL retains $570 million with super-OSJ deal

Kansas-based nVision Wealth will come under supervision of Chicago-based IHT Wealth Management.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print