With the SEC’s Regulation Best Interest (Reg BI) now a reality, our industry and its regulators—including FINRA and others—have been presented with a unique opportunity to create an improved framework that provides better access to objective, independent financial advice for all retail investors.

In order to capitalize on this opportunity—and to help shape a strong, healthy future for our industry and investors overall—we must ensure that FINRA’s Board of Governors includes members who understand how Reg BI will impact retail investors, advisors and firms.

With that in mind, there are four key issues that will have a profound impact on our industry’s future that independent broker-dealers and financial advisors should be actively thinking about in this summer’s crucial elections for the FINRA Board:

1. Ending rulemaking by enforcement. The number one issue that our regulators must tackle head-on is the tendency to set policy by imposing penalties on firms and advisors who lacked clear guidance beforehand. Enhancing transparency and making it easier for firms to work with our primary regulator will allow firms and advisors to provide better service to investors.

When advisors and firms know what to expect from rule-makers, we can give more specific guidance to investors and craft innovative solutions for them. Rather than creating a situation where firms and advisors operate under the ongoing fear of retroactive enforcement, our regulators have an opportunity today to fulfill their oversight responsibilities and help investors by returning to clearly delineated rules that are developed through an inclusive process.

2. Giving equal weight to the views of financial advice-focused firms and their clients. FINRA’s Board needs diverse perspectives and voices that represent the views of all financial services firms, financial advisors and their clients. This applies equally to firms with the narrowest of offerings as well as to those that pursue a more holistic approach.

While managing portfolios and executing transactions are crucial aspects of wealth management, there is also much more to this profession. Firms that focus on the delivery of holistic financial advice—including those that deploy life, annuity and fixed income solutions for their clients—need a more prominent and unified voice in educating the FINRA Board on what we do and the value we provide to retail investors. Rather than viewing investment solutions such as insurance and annuities with skepticism, FINRA should treat these solutions as what they are: useful resources with the potential to add significant value for retail investors.

3. Countering misperceptions. There continues to be an erroneous perception that firms primarily or exclusively focused on retail financial advice lack sophistication and strategic depth. In fact, nothing could be further from the truth. For one thing, advisors are increasingly called upon to build highly customized solutions for individuals and families, while also demonstrating a keen understanding of behavioral finance. For another, advisors routinely lead the coordination of strategies with an investor’s other trusted experts who specialize in various sophisticated professions. To counter regulatory misperceptions against our firms, the FINRA Board must include members who recognize the critical importance of this segment, which serves an ever-growing share of U.S. investors.

4. Level the playing field between the RIA and Broker-Dealer Spaces. Our industry and its regulators must do more to create a level playing field between broker-dealers and RIAs and end “regulatory arbitrage.” The current disparity between broker-dealer and RIA regulation benefits neither financial advisors who are committed to their clients, nor those clients. It also puts firms in the position of having to assess with every major new regulatory overhaul proposal whether it makes more sense to operate as a broker-dealer or an RIA.

In a properly functioning environment, broker-dealers and RIAs would not have to include regulatory changes in their list of considerations when evaluating their business model. With the passage of Reg BI, we have an unprecedented opportunity to drive greater alignment across the industry.

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