House Financial Services Committee Chairman Jeb Hensarling and Capital Markets Subcommittee Chairman Scott Garrett have given the Securities and Exchange Commission an ultimatum: Increase financial advisor exams by taking money and staff from other units.

The two have told SEC Chairman Mary Jo White in a letter to inform them by December 5 how the agency will reallocate resources to boost the frequency of advisor exams beyond the current 9 percent a year. Hensarling and Garrett’s letter also expressed opposition to allowing the agency to impose fees on advisors for additional reviews.

Their position was immediately rebuked by the Consumer Federation of America and the Financial Planning Coalition, a collection of advisor professional groups including the Certified Financial Planner Board of Standards, the Financial Planning Association and the National Association of Personal Financial Advisors.

The coalition reiterated its support for SEC user fees and promised to make it one of the coalition’s 2015 priorities. “While we are pleased that Chairmen Hensarling and Garrett recognize there is a problem resulting from the lack of investment advisor examinations, we strongly disagree that merely asking the SEC to reallocate its stretched and inadequate resources or outsourcing examinations to third parties is the solution," the coalition said in a prepared statement.

"Chairmen Hensarling and Garrett's recent letter opposing user fees ignores a well-documented Boston Consulting Group economic analysis that shows that user fees are the most cost-effective solution to increasing examinations," the statement continued. "Current legislation authorizing the SEC to assess user fees is supported by the very industry it would affect, has no impact on the American taxpayer and is scalable to address any small business concerns."

Consumer Federation Investor Protection Director Barbara Roper echoed the coalition's sentiments. “The SEC is grossly underfunded and cannot solve the problem of too infrequent advisor exams by shifting inadequate resources,” she said.  

White and her last two predecessors have urged Congress to give them more money to provide greater oversight of advisors.

For the last two years, the Obama administration has proposed SEC funding increases primarily to add 250 financial examiners. The hike was approved by the Democrat-controlled Senate appropriations committee, but vetoed by its counterpart in the Republican-dominated House.

But during the last two years, Hensarling has refused to allow the committee to consider a bill sponsored by the ranking Democrat Maxine Waters to permit user fees on advisors for additional reviews.

In their letter to White, the two House Republicans contend fees would be too costly for advisors and reduce their clients’ savings.

“Even a modest increase in advisory fees could significantly reduce long-term investment returns for millions of Americans who depend on this income to buy a home, pay for a child’s education or fund a secure retirement,” they wrote the SEC chairman.

In addition, it would force the SEC to hire hundreds of new employees, they said in the letter.

They also told White to prepare a timeline for the agency to consider a voluntary exam program for advisors or let them be audited by third parties.

A spokesman for the SEC declined comment in advance of the December 5 deadline.

FA Associate Editor Karen DeMasters contributed to this article.