The Financial Services Institute has come out strongly against new advisory firm fee increases proposed by the Financial Industry Regulatory Authority, claiming such fees would deal a serious blow to the industry.

The FSI's letter is in response to the SEC's June 28 solicitation for comments on the series of fee increases proposed by Finra affecting branch office registrations, new member applications, continuing membership applications, Central Registration Depository filings and the review of advertising and sales literature.

In a letter submitted to SEC Secretary Elizabeth M. Murphy dated July 19, Dale Brown, president and CEO of FSI, wrote that Finra's proposals "would greatly inflate the cost of doing business for financial services firms, hitting smaller firms the hardest."

"The fee increases will substantially increase the cost associated with basic broker-dealer operations and will disproportionately impact small broker-dealer firms," Brown wrote. "In addition, we believe the fee increases will have the unintended impact of restricting the availability of financial advice, products and services to investors. Furthermore, Finra has failed to provide an appropriate justification for these significant fee increases, especially in light of the current economic climate."

FSI is the advocacy organization for independent broker-dealers and financial advisors. Member firms formed FSI to improve their compliance efforts and promote the IBD business model.

The FSI also sent out a call to its member firms urging them to oppose the fees.

--Jim McConville