The House Financial Services Committee on Wednesday approved a bill to establish the Investor Protection Act, a financial services reform measure that could directly impact financial advisors.

The committee voted 41-28 to pass bill H.R. 3817 that among other things would double the budget of the Securities and Exchange Commission from $1.1 billion in 2010 to $2.25 billion in 2015, put more investment advisors under the supervision of state securities regulators, charge user fees to SEC-registered advisors to pay for the agency's inspection program, and end mandatory arbitration clauses in customer contracts.

In addition, the bill would apply a harmonized fiduciary duty standard of care for both broker-dealers and investment advisors who provide investment advice. The shape of this so-called harmonized standard is being hotly debated.

"This thing is still a moving target," says David Tittsworth, executive director of the Investment Adviser Association.

The broad measure aims to rein in some of the excesses and regulatory lapses that contributed to the recent financial meltdown. It includes steps to close regulatory loopholes and create whistleblower bounties to encourage identifying fraudulent activities.

The full House is expected to vote on this and other financial services reform measures in December.

The Senate Banking Committee is starting work on its own financial services reform bill.