FA: What do you think will actually happen, then?

RS: I think the first issues Rep. Barney Frank [chairman of the House Financial Services Committee] will deal with are more systematic-type risk issues he'll be looking at over the next two to three months. We're talking about solvency of the banking system-some very macro things. What we're hearing is once that's done, he might get into the retail advice side of things.

FA: You'd mentioned there is also some real advisor interest in recent comments by SEC Commissioner Luis Aguilar about more encompassing fiduciary standards that could be forthcoming in the not-too-distant future.

RS: The commissioner has come out strongly in favor of a fiduciary standard that would apply to everyone providing financial advice. He seems to be an ally of the RIA community and the FPA. Again, under a fiduciary standard you are required to do what is in the best interests of the client. If a certain type of bond in a broker's inventory is considered "suitable" for a client, now it's OK for the broker to sell that bond even if there are better ones out there. It's a bit of a fuzzy line. The advisor community considers Aguilar to be a champion of fiduciaries.

FA: In an address to the North American Securities Administrators Association's Winter Enforcement Conference in San Diego just after New Year's, for instance, he said the regulation of broker-dealers who provide investment advisory services is "one area to watch closely," adding that: "Historically, broker-dealers that simply effected transactions as directed by their clients generally would not be fiduciaries," but that, "As broker-dealers increasingly provide advice to their clients, the higher standards and fiduciary duties of advisors should also be applied to these broker-dealers." Does the FPA agree? Do you?

RS: Yes.

FA: I'm just curious also as to whether you think the issues surrounding FINRA and the possibility of an SRO for advisors down the line is something that has even hit President Obama's radar?

RS: Based on our meeting with Chair Schapiro, I really don't think so. When we spoke with her, we also made clear we believe in a fiduciary standard for advice. We don't think FINRA has the people or mechanism in place to regulate for a fiduciary standard. We think the best body to regulate RIAs is the SEC under the 1940 act that created the SEC. That law was born out of the Great Depression.

FA: Is the country in a depression now?

RS: No. We're in a severe recession. During the Great Depression, unemployment got to over 25%. We were at 7.6% in January.