Frank, chairman of the House Financial Services Committee, made his comments during a speech at the National Press Club in late July, reported Complinet, a news service for risk and compliance professionals in the financial services industry. Frank's office couldn't be reached for comment.
One of the debates in the ever-evolving financial services regulatory landscape is whether oversight of RIAs might shift from the Securities and Exchange Commission to an SEC-sponsored SRO. Industry scuttlebutt places the likely candidate as the Financial Industry Regulatory Authority Inc. (FINRA), the organization that regulates brokers.
That suggestion rankles the advisory community. As a result, Frank's comments were taken as a hopeful sign by some in the industry.
"I think it's good news for financial planners, but it's not a total shock," says Duane Thompson, managing director of the Financial Planning Association's Washington, D.C., office. "When you talk to members of Congress and their staff behind closed doors, I think some question whether FINRA would be a good fit as regulator for financial advisors.
"I'm not suggesting there's overwhelming opposition to FINRA," Thompson adds. "But I don't think people should take for granted the inside-the-Beltway talk that it's a slam dunk that FINRA will be the new Big Brother."
In a June speech at the Exchequer Club in Washington, D.C., FINRA chief executive Rick Ketchum cited the disparity between oversight regimes for broker-dealers and investment advisors as a regulatory gap that needs fixing.
Ketchum said that FINRA is positioned to build an oversight program that ensures investment advisors are properly examined and their customers are adequately protected, but added that whether FINRA should be vested with that authority "is ultimately for Congress and the SEC to answer."
CFP Board's Proposed New Education Standard
The Certified Financial Planner Board of Standards Inc. wants to put theory into practice with its proposal to add a financial plan development course to its educational standards.
The proposal would require aspirants to the certified financial planner certification to prepare a written, comprehensive financial plan as part of the established curriculum. Both the written plan and an oral presentation of the plan would be evaluated.
The CFP Board's education standards comprise coursework in the major financial planning areas including general principles of financial planning, insurance planning and risk management, employee benefits planning, investment planning, income tax planning, retirement planning and estate planning.