Representing our members’ interests as effectively as possible on regulatory and legislative matters requires us not only to be deeply involved in issues that are top of mind today, like the Securities and Exchange Commission’s Reg BI, but to anticipate where the next potential challenges for independent advisers and firms may emerge.
With this in mind, we continually identify the issues most likely to impact our members’ businesses both today and six to 12 months from now, in order to develop effective engagement strategies.
In 2020, our key advocacy priorities will be:
Issues of concern to independent financial services firms and advisers
Tax treatment of financial services and businesses. Independent advisers continue to face challenges to their independent contractor status. Reclassifying advisers would have profound tax implications that would undermine our industry’s economic model. We will continue to educate lawmakers on the unintended consequences of such efforts. In addition, we will continue to oppose proposals to tax financial services and transactions or impose professional privilege taxes on advisers.
Reducing burdens on business entities operated by advisers. The industry has evolved, and it is time for the SEC to allow payment of securities income directly from firms to business entities operated by advisers. We will continue to seek relief on this issue, as well as push to ease the burden of audits by the Public Company Accounting Oversight Board on small firms and allow association health plans.
Issues of concern to the financial services industry
Standard of care. We are committed to working with our industry and regulators to ensure that Reg BI successfully establishes an effective standard of care that improves investor protection and supports access to financial advice and services.
At the same time, we will continue to vigorously oppose efforts by states to create their own fiduciary standards or disclosure requirements to prevent a confusing patchwork of potentially conflicting regulations.
Regulation by enforcement. We will continue to fight back against enforcement actions that are predicated solely on staff guidance or that create new requirements without a transparent rule-making process that includes notice and comment. Accordingly, we remain committed to raising concerns about the SEC’s share class disclosure initiative, monitoring FINRA’s new examination program, and pressing for a “grace period” for Reg BI implementation.
Federal cybersecurity requirements. We support legislative efforts to create a national data breach notification requirement that preempts states’ own patchwork of unique approaches. We will also advocate for uniform, scalable requirements that will not unduly burden small firms.
Issues of concern to clients
Retirement security solutions provided by the private sector. We support the adoption of multiple-employer plans under Reg BI. Our efforts include supporting state MEPs and voluntary state-run retirement plans as alternatives to mandatory state-run retirement plans. We are also working to bolster Main Street Americans’ ability to save for retirement by advocating to restore the deductibility of advisory fees.
Prevention of financial exploitation of vulnerable adults. We will continue to encourage states to establish legislation to protect senior investors, patterned on NASAA’s model rule.
Bolstered by the support and engagement of our members, we look forward to a productive year working toward achieving these priorities.
Dale Brown is president and CEO of the Financial Services Institute.
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