The Security and Exchange Commission's long-awaited six-month study on financial advisor oversight has reached the following conclusion: let Congress decide on one of three options.

In a report issued late Wednesday, the agency's recommendations comprise the following: imposing user fees on SEC-registered advisors to pay for SEC exams; authorizing one or more self-regulatory organizations (SROs), under SEC oversight, to examine advisors; or authorizing the Financial Industry Regulatory Authority to examine dually-registered advisors who both sell products and dispense investment advice.

The SEC study was mandated as part of last summer's Dodd-Frank Wall Street Reform and Consumer Protection Act aimed at reforming the financial services industry. The study was commissioned out of concern that the agency doesn't have sufficient resources to adequately examine the 11,888 SEC-registered investment advisors. That's up from 8,581 advisors in 2004. Meanwhile, the number of exams conducted by the SEC have decreased--from 18% of advisors in 2004 to 9% in 2010.

In the study, the agency said user fees imposed on RIAs would provide scalable resources to enable the  SEC to "achieve an acceptable frequency of examinations."

The SEC noted that user fees might be less costly than creating an SRO to oversee advisors, although it hadn't crunched the numbers on how much it would cost to establish an SRO.

Regarding an SRO, which is an entity with market specific expertise funded by membership fees, the SEC said establishing one or more SROs under SEC oversight could boost the frequency of advisor exams. Multiple SROs could target specific types of investment advisors. For example, there could be different SROs for financial planners and money managers.

But the SEC study noted that multiple SROs could be more costly than a single SRO because it would be harder for them to achieve economies of scale. In addition, they could muddle the picture by developing their own approach and rules to applying the Investment Advisers Act.

As a result, the SEC said it might be better to designate a single SRO for investment advisors. And the likely candidate would be Finra. One reason, according to the study, is that creating another single SRO for investment advisors other than Finra would mean dually-registered advisors would be subject to more than one SRO--one for broker-dealers, one for investment advisors). As the existing SRO for broker-dealers, Finra already has that segment covered.

The study says if Congress goes the single SRO route, it could take an intermediate approach by granting an SRO limited examination authority while maintaining the SEC's authority for regulatory policy under the Advisers Act.

Finra has expressed an interest in taking on the SRO role for investment advisors. In a statement on its website, Finra applauded the SEC study's conclusion regarding SROs. "We agree with the SEC that an SRO can augment government oversight programs through more frequent examinations. As we have consistently stated, customers of investment advisers would benefit from the additional protection afforded by SRO oversight."

But industry groups representing SEC-registered investment advisors object to SRO oversight, particularly when it comes to Finra. "We concur with the SEC assessment that continued SEC oversight will avoid difficult scope of authority, membership, governance and funding issues raised by an SRO for investment advisers," Charles Moran, 2011 board chair of the Certified Financial Planner Board of Standards, Inc., said in a statement. "Continued SEC oversight would also alleviate our significant concerns associated with the extension of Finra oversight to investment advisers."

The SEC doesn't speak with one voice on this issue. SEC Commissioner Luis Aguilar has publicly opposed creating an SRO that would chip away at the agency's authority over investment advisors. But fellow Commissioner Elisse Walter who, like SEC Chairman Mary Schapiro is a former Finra official, has been on record saying she favors employing outside help for overseeing advisors.

Walter took the unusual step of publishing her own opinion about the study's findings on the SEC website. In it, she said the declining numbers advisors examined by the SEC is a partly a function of the growing number of investment advisors and an even greater rise in assets under management, the latter indicating that advisors are likely growing larger and more complex.

Her conclusion is that unless significant changes are made, the SEC can't fulfill its examination mandate for investment advisors. And that comes even after the Dodd-Frank bill substantially lessened the agency's workload by raising the asset threshold for SEC registration from $25 million to $100 million, which shifts oversight responsibility for more than 4,000 smaller advisors to state securities regulators.

Walter said the study's user fee option won't get the job done. Instead, she reiterated her belief that an SRO could enhance the SEC's own oversight resources, although she said it doesn't have to be a single SRO or that it has to be Finra.

Now the proverbial ball is in Congress' court. "I wouldn't expect a quick resolution," says Diahann Lassus, president of the wealth management firm Lassus Wherley and past chair of the National Association of Personal Financial Advisors, which favors maintaining the SEC's oversight role for RIAs. "Providing this to Congress will create more layers of discussion and debate, and a lot more time and energy, but we'll certainly tackle that."