Finra chief: Proposed oversight commission could cause cracks in system

The Obama administration’s consideration of a safety commission for financial products needs to be approached with great care, Richard Ketchum, chief executive of the Financial Industry Regulatory Authority Inc., said today at NAVA’s annual legislative and regulatory conference.
JUN 08, 2009
The Obama administration’s consideration of a safety commission for financial products needs to be approached with great care, Richard Ketchum, chief executive of the Financial Industry Regulatory Authority Inc., said today at NAVA’s annual legislative and regulatory conference. “It makes sense in mortgage financing, where there has been little focus on consumer protections,” he said during a keynote speech. “But in areas like securities regulation, where there are detailed [Securities and Exchange Commission], Finra and state rules and an infrastructure in place, there’s a huge risk in creating another entity that crosses over it.” A new agency could be duplicative and create new regulatory cracks, Mr. Ketchum said. Rather, something more limited, such as a statutory instruction across regulatory systems, such as banking and insurance, would be a better solution, he said. New regulations would have to encourage regulatory regimes to work together in order to eliminate gaps, Mr. Ketchum said. He pointed to the annuities sector as an area that is rife with regulatory gaps, saying that New York- and Washington-based Finra keeps the reins tight on variable annuities by requiring licensing exams, reviewing sales materials and requiring registered principals to approve VA purchases. But that isn’t the case in the fixed-annuity sector, Mr. Ketchum said. “Consumer protection depends on state regulations. In many states, you get detailed information on fees, but in some states, you may not,” Mr. Ketchum said. “Finra is ready to do our part to advance regulatory consistency,” he said. “We have reached out to state commissioners to engage in dialogue to ensure consistent regulatory requirements across all products.” NAVA, the variable annuity trade association, is based in Reston, Va.

Latest News

No succession plan? No worries. Just practice in place
No succession plan? No worries. Just practice in place

While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.

Research highlights growing need for personalized retirement solutions as investors age
Research highlights growing need for personalized retirement solutions as investors age

New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.

Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones
Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones

With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.

Insured Retirement Institute urges Labor Department to retain annuity safe harbor
Insured Retirement Institute urges Labor Department to retain annuity safe harbor

A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.

LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors
LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors

"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.