Going independent to get away from the restrictive and sometimes archaic FINRA rules may seem appealing to some advisors, as does the relatively limited enforcement staff of the SEC. But if new SEC Chair Mary Jo White has her way, enforcement at the SEC could increase “substantially” if her 2014 budget request to increase funding by 33% is approved.
In testimony before the House Committee on Financial Services, White cited the need to increase the 8% of advisors that the agency is able to examine — a number that is significantly lower than the percentage of advisors examined by FINRA, an SRO. White also noted that her agency was reviewing rules that would create a uniform fiduciary standard while being sensitive to the various business models that currently exist.
Congress is expected to pass a “message” bill this week encouraging the SEC and DOL to work together to create a single standard.
