Washington INsider

Washington INsiderblog

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

Jun 4, 2013, 8:26 AM EST

Say what? Advisers ask lawmakers for more regulation, fees

By Mark Schoeff Jr.

A couple dozen investment advisers fanned out across Capitol Hill with an unusual “ask” of lawmakers today. They weren't seeking less regulation and lower fees, they were seeking more.The Investment Adviser Association sent about 45 members to the Hill to lobby legislators and their aides in favor of legislation that would authorize the Securities and Exchange Commission to charge advisers user fees to fund adviser examinations. The bill, introduced in March by Rep. Maxine Waters, D-Calif., ranking member of the House Financial Services Committee, is designed to increase the number of adviser exams each year. The SEC has said that it can examine annually only about 8% of the nearly 11,000 registered investment advisers.Skip Schweiss, managing director of adviser advocacy for TD Ameritrade Institutional, said that advisers agree that that number is too low. “We're coming with an unusual message,” said Mr.... Read full post

Apr 26, 2013, 2:46 PM EST

Financial Literacy Month passes quietly on Capitol Hill

By Mark Schoeff Jr.

That many, if not most, Americans are woefully short on knowledge about finances and financial markets is no surprise. Even so, it will take more than special recognition over the course of a month to build momentum on Capitol Hill for the topic of financial literacy.Only a handful of relevant bills were introduced this month. Just one piece of legislation has more than 10 cosponsors — a Senate resolution designating April as Financial Literacy Month. And that was just approved April 23.The Certified Financial Planner Board of Standards Inc. was on the Hill today trying to generate interest in financial education by providing it for congressional staffers. The organization set up shop in a House office building for three hours, offering CFP volunteers for 15-minute sessions of financial advice.It was a pretty smart move. As a former Senate aide, I can attest to the fact that knowledge of the financial markets was not abundant... Read full post

Mar 20, 2013, 5:47 PM EST

White's early agenda could impact advisers

By Mark Schoeff Jr.

Mary Jo White's nomination to be the next chairman of the Securities and Exchange Commission sailed through the Senate Banking Committee on Tuesday with the support of all the panel's Republicans. She may get Senate approval as soon as this week through a speeded up voting process called unanimous consent.Even if the Senate doesn't act before departing on a two-week recess this weekend, Ms. White is likely to be approved in early April. When she walks through the doors of the SEC's Capitol Hill headquarters, here's how she might weigh in on key issues affecting investment advisers:Private placement advertising rule speeds up One of the reasons that Ms. White gained the full support of the banking panel Republicans is that she said in her March 12 nomination hearing testimony that she would prioritize rulemaking related to legislation that would ease securities registration for small and emerging companies, known as the Jumpstart Our... Read full post

Mar 15, 2013, 3:26 PM EST

Politics of adviser oversight starting to change

By Mark Schoeff Jr.

Last year, investment advisers were playing defense on Capitol Hill on the issue of regulation. This year, they're on offense, and that gives the debate a different flavor.In 2012, then-chairman of the House Financial Services Committee Spencer Bachus, R-Ala., introduced a bill in June that would have authorized a self-regulatory organization to oversee advisers. Advisers worked hard to defeat that legislation, calling it a costly added layer of regulation that would threaten small advisory firms. Enough Republicans listened to that argument to prevent Mr. Bachus' bill from receiving a committee vote.As an alternative, advisers rallied around a measure offered by Rep. Maxine Waters, D-Calif., that would authorize the Securities and Exchange Commission to fund adviser exams through a user-fee assessed on advisers. Both bills sought to increase the number of annual adviser exams, with Ms. Waters' bill keeping oversight under the aegis of ... Read full post

Mar 8, 2013, 4:56 PM EST

Advocates to advisers: Charge Capitol Hill

By Mark Schoeff Jr.

Even though members of Congress are routinely excoriated for being out of touch with the rest of the country, nothing means more on Capitol Hill than input from constituents. Investment advisers experienced this first-hand last year. The collective efforts of investment adviser advocacy organizations was the key to stopping legislation that would have authorized an industry-run regulator to replace the Securities and Exchange Commission in directly overseeing advisers.It's an idea that advisers hate. They say a self-regulatory organization would add a costly additional layer of regulation and burden small advisers with higher costs. They got that message across last year by sending emails and letters to federal lawmakers and conducting dozens of meetings with them and their staffs, according to David Tittsworth, executive director of the Investment Adviser Association.“The story of the last year was the involvement of the... Read full post

Mar 4, 2013, 3:33 PM EST

SEC idea for harmonization a 'disaster' for advisers, says industry advocate

By Mark Schoeff Jr.

As the Securities and Exchange Commission embarks on an effort to quantify the impact on the financial markets of increasing investment-advice standards for brokers, it is signaling that it may first adjust the rules governing brokers and investment advisers.In its exhaustive 72-page request for information released on Friday, the agency said that it is undertaking “a broad consideration of harmonization of regulatory obligations” in areas such as advertising, the use of solicitors, supervision, licensing and registration, continuing education and books and records. Some adviser advocates are worried about what the SEC has in mind. “It looks as if the SEC is holding open the option of moving forward on rules harmonization in lieu of a fiduciary standard,” said Duane Thompson, senior policy analyst at Fi360. “If that happens, it would be a disaster for investors and investment advisers in terms of... Read full post

Mar 1, 2013, 3:32 PM EST

Adviser issues lack Madoff moment

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... Read full post

Feb 22, 2013, 6:08 PM EST

SEC commissioners keep tweaking fiduciary-duty cost request

By Mark Schoeff Jr.

A year ago, the Securities and Exchange Commission said it would assess the costs of a potential rule that would raise investment-advice standards for brokers. One reason that a request for data has not yet been released is because SEC commissioners keep tweaking it.“It's about ready for prime time,” SEC member Luis Aguilar told reporters on the sidelines of a Practising Law Institute conference in Washington on Friday. Last week, SEC Chairman Elisse Walter told the Senate Banking Committee that the cost-benefit-information query would go out “in a month or two.”First it has to pass muster with the current four-member SEC. The document has circulated several times to each of the commissioners. Instead of achieving the necessary number of sign-offs, however, it is continuously modified – sometimes by just a few sentences at a time.“The merry-go-round has not yet stopped,” Mr. Aguilar said.... Read full post

Feb 15, 2013, 2:59 PM EST

Adviser issues fly under the radar in Congress

By Mark Schoeff Jr.

Investment adviser issues in Congress are like the helicopters used to deliver the Navy SEAL teams that raided Osama bin Laden's compound in Pakistan. They fly under the radar.On Friday, the House Financial Services Committee approved an oversight agenda for the new Congress. It includes a paragraph about policy toward advisers and broker-dealers on page 8. Most of the language is boilerplate. The panel promises to review the Securities and Exchange Commission's efforts to harmonize the standard of care for retail investment advice that advisers and brokers must provide. It also will “review proposals that would harmonize the frequency of examinations of broker-dealers and investment advisers.” Although that line suggests that maybe legislation to establish a self-regulatory organization for advisers is not dead, the issue lacks a champion so far, and its chief proponent, the Financial Industry Regulatory Authority Inc., is ... Read full post

Feb 12, 2013, 3:07 PM EST

Listen for what Obama says – or doesn't say – about taxes

By Mark Schoeff Jr.

In his State of the Union speech Tuesday night, President Barack Obama will foreshadow the prospects for comprehensive tax reform – either through what he says or what he doesn't say.It's likely that we'll learn more by the silence. On most issues, getting anything done in Washington is a heavy lift. Broad tax reform is perhaps the most complicated, difficult of them all. It requires the type of presidential leadership that often is launched through a major speech, such as the one Mr. Obama is giving in a few hours.“If the president wants it to happen, he's going to have to pull on both oars,” said Dean Zerbe, national managing director of alliantgroup LP and a former Republican tax counsel for the Senate Finance Committee. “It needs to be a centerpiece of the speech, not a throw-away line.”One hint that Mr. Obama is not making broader tax reform a priority is that he is seeking to reform tax deductions... Read full post

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  @IN Wire

Mar 11 10:40PM
Three full laps around #CentralPark on my inlines: 18 miles! And on the 1st day of outdoor. #kickass #takenames #inline #speedskating
Mar 11 10:07PM
Finra bonus disclosure rule goes to the SEC http://t.co/xI512m9AN5

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