Prominent Advisors Come Out In Favor Of Student-Created RIA Regulator

Monday, April 18, 2011 23:49
Prominent Advisors Come Out In Favor Of Student-Created RIA Regulator

Tags: Dodd-Frank | FINRA | sec

If the SEC gives up its oversight of registered investment advisors, the regulator created by law students at the University of Mississippi is getting a bit of traction as a possible alternative to FINRA supervision.

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The Self-Regulatory Organization for Independent Investment Advisors (SROIIA) began about six weeks ago as an experiment in reframing the debate around whether advisors could build their own regulatory organization or would be forced to accept FINRA oversight.


Since then, the group has remained more of an abstraction than anything else -- until a blue-ribbon committee including Sheryl Garrett, Harold Evensky, Ronald Roge, and others recognized it as a possible alternative to FINRA.


The Committee for the Fiduciary Standard "strongly" supports an RIA-only SRO in order to preserve the fiduciary channel as separate from less conflict-free modes of delivering investment advice.


If that means turning the SROIIA into a full-fledged regulator as an alternative to FINRA, then, apparently, so be it.


Comments (2)

Unfortunately its nearly certain that supporting the idea of an SRO instead of the SEC will make FINRA the SRO. FINRA has way too much political muscle and their claim of expertise and scale gives their politicians easy cover to pick FINRA. So if we do not want FINRA, given the current congress, the SEC is the only alternative- just say no to SRO.
bramsay , April 19, 2011
Bill's read on the situation is exactly right. The SEC is underfunded and won't get additional funding in this fiscal environment. Outsourcing RIA regulation to an SRO is the least expensive way to get RIAs examined more often. And the SRO alternative that will get the most support is FINRA. Handwriting is on the wall.
agluck , April 20, 2011

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