A coalition of financial planning, consumer and regulatory organizations is asking Congress to pass legislation to allow the SEC to collect user fees from SEC-registered investment advisors.

The move is needed because the proposed 2014 omnibus budget bill scheduled to be voted on in the House and Senate this week will not provide enough money for the SEC to adequately monitor investment advisors, according to the coalition. 

The SEC already has difficulty monitoring investment advisors because it lacks funding, according to the coalition. The SEC examined 8 percent of the approximately 11,000 SEC-registered investment advisors last year and the agency does not expect to be able increase the examination rate with existing resources.  Moreover, approximately 40 percent of RIAs have never been examined by the agency, the coalition says. 

The money from the user fees would be used to increase the number and frequency of SEC examinations of firms. The groups support H.R. 1627, the Investment Adviser Examination Improvement Act, introduced by Rep. Maxine Waters (D-Calif.) and Rep. John Delaney (D-Md.).

Organizations supporting the legislation include AARP, Consumer Federation of America, CFP Board of Standards, Financial Planning Association, Investment Adviser Association, National Association of Personal Financial Advisors and the North American Securities Administrators Association. The CFP Board announced the action Tuesday.

Barbara Roper, director of investor protection for the Consumer Federation of America, says, “Funding for the SEC has not kept pace with dramatic changes in the marketplace, including the participation of more and more middle-income investors who rely on the capital markets to save for retirement and other important financial goals. While the lack of resources has hampered many essential functions at the agency, one of the more glaring shortfalls is in funding for the investment adviser oversight program. Failing to fund this program properly has a direct impact on investors, putting more investors at real risk of losing their retirement nest egg.”

Authorizing the SEC to collect user fees is “an efficient, economical and commonsense solution to the SEC’s chronic problem of insufficient examination resources,” the organizations said in a letter to members of Congress.