Advisers should gird for higher compliance costs: RJ's Helck

Investment advisers should get set for higher compliance costs — as well as a self-regulatory organization, said Chet Helck, chief operating officer for Raymond James Financial Inc. A new SRO could be formed or the Financial Industry Regulatory Authority Inc. could take on adviser regulation, he said. “But it's clear RIAs will have a supervisor, and they will have to pay for it,” Mr. Helck told attendees last Tuesday at the firm's conference in St. Petersburg, Fla., for its own registered investment adviser clients. Mr. Helck, who has been an active participant in the regulatory debate, told attendees he doubts that lobbying by advisers will stem the tide toward an SRO. A draft bill being floated by House Financial Services Committee Chairman Spencer Bachus, R-Ala., which would establish one or more SROs for advisers, is unlikely to pass in its current form, Mr. Helck said. But “someone will get a bill through” Congress, he said later in an interview. “In Washington, there's too much appetite” for a regulatory fix, he said. “Just look at the [Occupy Wall Street] protests in the street — the public believes Wall Street is responsible for all the problems. It's politically difficult for Congress to say, "We're not going to make it better' by leaving adviser oversight as is.” Mr. Helck also warned the group of advisers: “There's no such thing as self-regulation. Today, it means you self-pay” for regulation by an outside body. “I can tell you, Finra takes guidance not from its membership but from the SEC,” he said. Email Dan Jamieson at [email protected]