Category Archives: Investment Adviser Oversight

Investment News: House provides SEC with $50 million budget boost

Mark Schoeff of Investment News reports that the spending bill passed by the House of Representatives on June 16 raises the SEC’s budget by $50 million, but is $300 million less than the SEC needs to strengthen investment adviser oversight. Efforts by Rep. Maxine Waters (D-CA) to attach an amendment allowing the SEC to charge user fees to make up for this budget shortfall were unsuccessful. The bill also includes an amendment barring the SEC from imposing a fiduciary standard on broker-dealers during the federal fiscal year beginning October 1.

Excerpt– The House of Representatives approved a spending bill Wednesday that denies the Securities and Exchange Commission the funding it says it needs to strengthen investment adviser oversight.

In a 228-195 vote, the House passed a $21.3 billion appropriations bill that funds the SEC, Treasury Department and many other agencies. The measure gives the SEC a $50 million budget increase, about $300 million less than the agency requested. Under the bill, the SEC would operate on a $1.4 billion budget in fiscal 2015, which begins on Oct. 1.

Continue Reading. 

 

Financial Planning Coalition Urges Passage of Legislation to Improve Investment Adviser Oversight and Better Protect Investors

Bill Would Increase Investment Adviser Examinations

Washington, D.C. – The Financial Planning Coalition – comprised of Certified Financial Planner Board of Standards, Inc. (CFP Board), the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA) – urges Congress to enact the Investment Adviser Examination Improvement Act of 2013, introduced by Representative Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee with Representative John Delaney (D-MD) as an original co-sponsor.

Authorizing the U.S. Securities and Exchange Commission to collect user fees from advisers to increase examinations is a pragmatic and cost-effective solution to a significant investor protection problem. It will have no financial impact on taxpayers or the federal deficit and is supported by the investment adviser industry. Increasing adviser examinations is good for both consumers and advisers.

The Coalition plans to work with Reps. Waters and Delaney to support this needed piece of investor protection legislation and encourages other members of Congress to enthusiastically endorse this important measure.

Investment News: RIAs should be forced to hire outside examiners: Gallagher

Mark Schoeff of InvestmentNews reports that SEC official wants registered investment advisers to be forced to hire third-party contractors to conduct examinations, increasing the oversight of advisers.

Excerpt: Securities and Exchange Commission member Daniel Gallagher wants registered investment advisers to be forced to hire third-party contractors to conduct examinations.

In remarks at the Financial Industry Regulatory Authority Inc.’s annual conference in Washington, Mr. Gallagher recommended that the SEC write a regulation that would require advisers to hire an examiner to review their operations.

Continue Reading…

Financial Advisor: SEC’s Budget Fails To Protect Investors, White Says

Ted Knutson of Financial Advisor reports that the SEC is not providing investors with “sufficient protection” against dishonest advisors because of budget shortfalls.

Excerpt: The Securities and Exchange Commission is not providing investors with “sufficient protection” against dishonest advisors because of budget shortfalls, SEC Chairman Mary Jo White told Congress today.

Noting that the SEC only has 19 examiners per trillion dollars in investment advisor assets under management, White appealed for money to hire 250 advisor examiners. The examiners are needed for better oversight of advisors, whom she said consumers are increasingly relying upon to deal with securities markets and retirement planning.

Continue Reading…

Financial Planning Coalition Statement on SEC Oversight Hearing

Washington, D.C. – The Financial Planning Coalition – comprising Certified Financial Planner Board of Standards, Inc. (CFP Board), the Financial Planning Association® (FPA®), and the National Association of Personal Financial Advisors (NAPFA) – issued the following statement in response to Securities and Exchange Commission (SEC) Chair Mary Jo White’s testimony during today’s House Financial Services Committee SEC Oversight hearing:

“The Financial Planning Coalition is gratified that Chair White and the SEC continue to make the consideration of a uniform fiduciary standard for broker-dealers and investment advisers a high priority. But the time for action in the name of investor protection is now. We urge Chair White and the SEC to heed the recommendations of investor advocates, adviser groups, and the major broker-dealer trade association, as well as its own Investor Advisory Committee, and proceed with this much-needed rulemaking under Section 913 of the Dodd-Frank Act.”

“In addition, the SEC’s current inability to regularly examine registered investment advisers needlessly exposes investors to greater risks of fraud and abuse. Authorizing the SEC to collect user fees from advisers is a pragmatic and cost-effective solution to fill the gap in the Commission’s funding, and we call on Congress, beginning with the House Financial Services Committee, to make this a reality.”

Throughout the SEC’s deliberations on these matters, the Coalition has sought to be a resource, including most recently documenting the clear harm to investors caused by the absence of a uniform fiduciary standard. The Coalition agrees with Chair White that if the Commission is to fulfill its mission to protect investors, it must be adequately funded to effectively examine SEC-registered investment advisers, who manage approximately $48 trillion of American investors’ assets each year. We are committed to working with the SEC, Congress and all interested parties to restore trust in our capital markets through the appropriate regulation and oversight of those who provide financial advice to American investors.

Financial Planning Coalition to President Obama: Make Investor Protection a Priority in 2014 “Year of Action,”

In advance of the State of the Union address, the Financial Planning Coalition urges the President to make investor protection part of his agenda.

WASHINGTON, D.C. – As President Obama prepares to deliver the State of the Union address, the Financial Planning Coalition – comprising Certified Financial Planner Board of Standards, Inc. (CFP Board), the Financial Planning Association® (FPA®), and the National Association of Personal Financial Advisors (NAPFA) – urges the President to fulfill the promise of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act by making investor protection part of his “year of action for the American people”:

Continue Reading…