The choice of Mary Schapiro as the new chief of the Securities and Exchange Commission would bring an experienced regulator to the helm at a critical time for the beleaguered agency, but not everybody in the advisor community is doing cartwheels over the news.

Schapiro, 53, chief executive of the Financial Industry Regulatory Authority (FINRA), was named this week by President-elect Barack Obama to guide the SEC during a time of turmoil when the agency has been criticized for its failure to spot Bernard Madoff's $50 billion Ponzi scheme and its perceived ineffectiveness during this year's Wall Street crisis.

Schapiro's background includes previous work with the SEC and a stint as chairwoman of the Commodities Futures Trading Commission, along with her recent role at FINRA. It's her last job that makes some advisor groups uncomfortable, given their distaste for the notion bandied about that regulators are possibly contemplating the idea of creating a self-regulatory organization (SRO) for all investment advisors under the auspices of FINRA or the SEC. That notion has been strongly opposed by groups such as the Financial Planning Association (FPA), which fear that FINRA's responsibility for regulating brokers and the sale of financial products makes it an inappropriate regulator of financial advisors.

Duane Thompson, managing director of the FPA's Washington, D.C. office. says it's too early to judge her appointment but that he has reservations. "I think what the SEC needs in addition to strong leadership--which she of course comes with--is a desperate need for new ideas. One of the ideas the SEC never embraced was the fiduciary standard. She [Schapiro] has never come out and said the investor should come first and that their interests should come ahead of Wall Street firms.

"If she could make that kind of statement in her testimony to Congress during her hearing before the Senate Banking Committee," Thompson adds, "that would provide a tremendous amount of confidence for the financial planning community."

Schapiro's nomination got a warmer response from the Investment Adviser Association, a Washington, D.C.-based organization representing about 500 investment advisors engaged primarily in money management for high-net-worth clients and institutions. Neil Simon, IAA's vice president for government relations, says that while his group strongly opposes the creation of an SRO because it would be an unnecessary and costly proposition for advisors, it nonetheless fully endorses Schapiro's appointment.

"Should there be a merger of the SEC and the CFTC, which has been talked about, she's a good person to be involved because she's been one of the few people with substantial regulatory experience who's been at both the SEC and CFTC," he says.

Diahann Lassus, chairperson of the National Association of Personal Financial Advisors and president of the advisory firm Lassus Wherley in New Providence, N.J., says she was surprised by Schapiro's nomination. Like with Thompson at FPA, she is taking a wait-and-see stance toward Schapiro's appointment.

"Whoever is appointed has to do a better job enforcing the regulations," Lassus says. "Our job is always to make sure the public is protected."