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 pessimistic.
An attempt to add some edge to the adviser/broker section of the oversight plan was shot down on Friday. Democrats offered an amendment targeting the risky sales of private securities offerings.
The amendment would have inserted this line: “The committee will also review the sale of unregistered products and public but not traded products to determine the adequacy of disclosure, including share valuation comparisons with traded alternatives, and the disclosure of all associated fees, including a comparison of fees to traded alternatives.” The measure was voted down along party lines, 33-24.
On the other side of the Capitol, the profile of adviser issues is no higher. In fact, the
Senate Banking Committee's oversight agenda for the new Congress, released by Chairman Tim Johnson, D-S.D., on Tuesday doesn't even mention investment advisers or brokers, although there is a paragraph on investor protection on page 6.
The committee agendas are not binding. Of course, a lawmaker could introduce legislation at any time that pertains to adviser issues. In addition, lawmakers can elevate adviser policies at hearings, as
Sen. Jon Tester, D-Montana, did on Thursday.
For now, though, you'll need binoculars to make out what's happening on Capitol Hill that directly impacts investment advisers.
