Schwab Advisor Services and TD Ameritrade Institutional rally the troops to oppose bill
Schwab Advisor Services and TD Ameritrade Institutional are rousting the troops to oppose a bill that would mandate SRO membership for most SEC-registered advisers.
A hearing to discuss the Investment Adviser Oversight Act of 2012, introduced by House Financial Services Committee Chairman Spencer Bachus, R-Ala., and Rep. Carolyn McCarthy, D-NY, is scheduled for Wednesday, June 6.
The bill is commonly referred to as the Bachus bill.
On Thursday, Tom Nally, president TD Ameritrade Institutional, emailed the firm's RIAs asking them to fill out an online survey about their preference for a regulatory scheme for advisers.
The survey was in preparation for a lobbying trip next week to Washington by Skip Schweiss, managing director of advisor advocacy and industry affairs at TD Ameritrade Institutional.
Mr. Schweiss and Gil Ott, deputy general counsel for TD Ameritrade, will be meeting with Mr. Bachus, Ms. McCarthy and the ranking member of the House financial panel, Rep. Barney Frank, D-Mass., on June 5.
"Your input will be used to help inform Skip and Gil's discussion with the Chairman and Representatives' staff next week," Mr. Nally said in his message.
In an interview, Mr. Schweiss said shifting adviser oversight from the Securities and Exchange Commission to an SRO is the wrong way to accomplish the goal of increasing adviser examinations.
“We don't believe that adding another layer of regulation is the right way to approach it,” Mr. Schweiss said. “Let's make the existing regulations and processes better.”
Mr. Schweiss will go to Capitol Hill armed with the results of the survey of TD's 4,500 advisers, which is likely to show that they overwhelmingly oppose an SRO.
Meanwhile on Wednesday, Bernie Clark, executive vice president of Schwab Advisor Services, sent an email to the firm's 7,000 advisers asking them to "add your voice to the strong message we'll be delivering to Congress" about the Bachus bill.
Mr. Clark will also be in Washington next week as part of a lobbying event on June 7 sponsored by the Investment Advisers Association to oppose the bill.
"Studies have come out showing that an SRO for advisors would be more cumbersome and expensive," Mr. Clark said in his email.
Mr. Clark asked Schwab advisers to email their Congressmen, or email him directly with their thoughts on the Bachus bill. In addition, he suggested advisers make their point on Twitter on June 7 and include #OpposeHR4624 in the message.
Even though the SRO bill has undergone little revision from the time it was released as draft legislation last September until it was introduced as a formal bill in April, Mr. Schweiss is encouraged that Mr. Bachus asked to meet with him in order to better understand TD's position on the issue.
“That tells me that they have a general interest in hearing from the industry and have some open-mindedness about it,” he said.
"We've gotten more than 200 advisor responses to date and they are still coming in," said TD Ameritrade spokesperson Kristin Petrick via email.
Schwab has seen close to 100 responses so far, said spokesman David Neibart in an email, adding that some Schwab advisers may have made contacts through the Investment Adviser Association.
David Tittsworth, executive director of IAA, was not immediately available.
Mr. Tittsworth is scheduled to testify at the June 6 hearing.
Among RIA custodians, Schwab and TD Ameritrade have been the most outspoken in opposing an SRO for advisers.
"Fidelity has been engaged in a dialogue with the industry and policymakers to help determine the best way forward," said spokesman Steve Austin in an email.
