The Finra proposal is “a license to not supervise” the RIA, he said.
“There’s no upside for an investor” in dropping supervision for RIAs who rarely get examined by states or the SEC, Buchwalter said. “No good can come of it.”
Finra’s proposal is in response to feedback from an ongoing retrospective review of rules begun last year. The current supervisory requirement, which dates from 1994, has caused confusion and raised privacy issues for B-Ds that must get account information from unaffiliated RIAs, Finra said in releasing the proposal.