More than 1,000 financial planners contacted members of the House to oppose a provision in financial-reform legislation that could put many advisory firms under the jurisdiction of the Financial Industry Regulatory Authority Inc.
The Financial Planning Coalition, which includes the Financial Planning Association, the National Association of Personal Financial Advisors, and the Certified Financial Planner Board of Standards Inc. on Monday sent out alerts to their constituents asking them to contact their congressmen to oppose the provision of the Wall Street Reform and Consumer Protection Act (HR 4173), which the House is to take up as early as Wednesday.
“That was No. 1 on our hit list,” said NAPFA membership manager Nancy Hradsky, who works on the coalition.
An amendment has been offered by House Financial Services Committee Chairman Barney Frank, D-Mass., and Rep. Steve Cohen, D-Tenn., that would delete the Finra provision from the legislation.
The House Rules Committee will decide Wednesday what amendments will be voted on by the full House. The House is expected to approve the comprehensive legislation this week.
The bill includes major changes to financial regulation, including the creation of a consumer protection agency and a financial-stability council to guard against systemic risk from large financial companies.
The bill also would require the Securities and Exchange Commission to write new fiduciary standards for all financial advisers. In addition, the legislation would give the SEC the power to impose fees on advisory firms to cover the cost of increased inspections on the firms.
The Finra amendment, originally sponsored by Financial Services Committee Ranking Member Spencer Bachus, R-Ala., has been the most controversial provision in the House bill for investment advisers, who strongly oppose coming under Finra's jurisdiction. Advisers argue that Finra is not well-suited to regulate advisers, because Finra's expertise is with regulations governing brokerages.