"It's about getting materials in the hands of our 150,000 members," Schwartz said. With these, he said, members can talk about it with local newspapers or put the information in brochures. "This kind of viral marketing could be a starting point."
Still, FSI members often sell proprietary products, even though they are independent, and care must be given to make the overall message consistent.
"Those are the subtleties on what exactly does 'independent' mean," Schwartz said. "If we can agree on certain basic things, every rep is free to modify the basics to whatever suits them."
States Gear Up To Examine More Advisors
(Dow Jones) As U.S. lawmakers redraw the map of financial regulation, state securities regulators from Texas to New Jersey are eyeing a plan to examine thousands of additional advisors. The question is if they can afford it.
Prompted by the wave of investment fraud exposed during the financial crisis, lawmakers and state securities regulators are pushing to assume oversight of many investment advisors now under the eye of the Securities and Exchange Commission. About 4,000 advisors managing between $25 million and $100 million in assets would shift from federal to state supervision under proposals in Congress, according to the North American Securities Administrators Association, or NASAA, an organization of state regulators.
States are better equipped to dig into local matters and can examine advisory firms more frequently than the SEC, says Denise Crawford, NASAA president.
Currently, the SEC says it inspects 9% to 12% of the 11,000 advisory firms it oversees. Regulators from the various states are in the process of signing an agreement to cooperate with one another in policing additional advisors if the proposal becomes law.
But the movement is occurring as states are struggling with drops in tax revenue and widening budget gaps. Those shortfalls approach a combined $180 billion for 48 states, according to the Center of Budget and Policy Priorities.
Some $40 billion in federal assistance will help, says Nicholas Johnson, director of the group's State Fiscal Project. He points out that states can still make regulation a priority. In California, for example, a fee-based system has insulated securities regulation from the state's $20 billion budget gap.
"The budget shortfalls in our state are legendary at this point but our department's revenue stream is mainly self-funded," says Preston DuFauchard, California's corporations commissioner.
California would oversee about another 600 advisors under the plan, according to NASAA. The state is considering new fees to cover the costs of extra examinations. A $25 yearly renewal fee could generate up to $7.5 million from advisors, says DuFauchard. Still, right now California can handle only about 300 exams a year, he says. That translates to an average of one exam every ten years for advisors in the state.