The National Association of Personal Financial Advisors (Napfa) is looking for Congress to overhaul the proposed Investment Adviser Oversight Act of 2012 (HR 4624), claiming that it will exempt the largest advisory firms from paying into a mandatory fund, leaving smaller firms to foot the bill.

Napfa officials in a prepared statement say that such mandatory fees -- likely to be administered by the Financial Industry Regulatory Authority (Finra) -- would be predominantly borne by small, independent advisory firms. As the bill proposes, advisor fees would be used to fund a self-regulatory organization (SRO) to monitor and regulate financial advisors.

HR 4624 is co-authored by House Financial Services Chairman Spencer D. Bachus, R-Ala., and Rep. Carolyn McCarthy, D-N.Y.

Citing a May 2012 Massachusetts Securities Division Report, Napfa officials contend that Finra oversight could lead to the demise of independent financial advisors.

The Massachusetts Securities Division report conducted a survey of 649 registered investment advisors to measure the impact HR 4624 would have on the state's advisors. According to the survey, 98 percent of advisors indicated they fear the bill's passage would negatively impact the financial health of their firms. Among those advisors surveyed, 69 percent described the bill's potential damage as "severe," while 41 percent indicated that they may be forced to close their businesses altogether.

With more than 2,400 members, Napfa is the leading professional association in the U.S. dedicated to fee-only financial planning.

"We all need to be very attentive here," said Susan John, chair of Napfa. "The Massachusetts report clearly indicates that independent advisors fear a worst-case scenario, and with good reason. Reducing investor choice when consumers have begun to show a preference for unbiased, professional advice is bad for the public. And the thought of seriously reducing the availability of qualified, objective advice for the public is bad business for everyone."

Napfa officials are also exhorting members of the House Financial Services Committee to reject HR 4624 and in its place provide the Securities and Exchange Commission with additional funding to perform advisor industry oversight.

"That will ensure independent advisors are in an examination program that protect investors from bad actors and continues to provide the public with advisors, like Napfa's members who willingly have the highest standards in the industry," Napfa officials said.

-Jim McConville