The Certified Financial Planner Board of Standards is putting its chips behind the Securities and Exchange Commission and not the Financial Industry Regulatory Authority (Finra) as the proper official entity to oversee investment advisors, the Board officials told reporters at a press briefing at the FPA conference in San Diego on Friday.

CFP Board said it would require an additional infusion of funds from Congress to accomplish the task of the SEC continuing to monitor advisors. Board officials contend that Finra does not have the expertise to monitor and enforce the fiduciary standard for registered investment advisors and questioned whether Finra's operating budget may actually cost investment advisors even higher fees than the SEC.

"We are firmly in the camp that setting up a whole new organizational bureaucracy is not the right solution," said Marilyn Mohrman-Gillis, managing director of public policy and communications of the Washington D.C.-based CFP Board. "The SEC has 70 years of experience overseeing advisors. We think the SEC is the adequate body to do that and that the SEC needs to be funded to do that."

As required by the 2010 Dodd Frank Act, the SEC last year conducted a study on enhancing investment advisor examinations. The study includes three options for increased oversight: increase its own ability to conduct examinations, create a new self-regulatory organization (SRO) or grant the power to Finra, the SRO overseeing broker-dealers. The ultimate decision will fall to Congress.

The CFP Board is working in tandem with the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA) that collectively represent an estimated 75,000 financial planning professionals.

The National Association of Insurance and Financial Advisors (NAIFA) opposes the trio and is backing Finra to become the SRO of financial advisors.

CFP Board chief executive officer Kevin Keller acknowledged that their coalition is up against an opponent with deep pockets. "We are up against the insurance industry that's been around for 100 years or more; we're up against Wall Street."


-Jim McConville