In the long run, she says, investors will be well served by the regulatory switch. "Let's not make perfection the enemy of good," she says.
"The fact that the president just signed the law in July makes it a little unrealistic to expect the states to already have their rules ready to go now. But that doesn't mean state regulators won't be ready to go when the vast majority of RIAs are ready to make the switch."
And there was little choice, she adds, since the law before wasn't working.
"There is no reason to believe that if the Dodd-Frank reforms had not been enacted that the SEC would suddenly have begun examining RIAs," says Crawford. "Would you want your entire nest egg in the hands of an RIA that has never been inspected by a government entity to ensure that your money is actually where you have been told it is? Would you prefer that kind of situation to some confusion while state regulators implement the switch?"
Editor-at-large Andrew Gluck, a veteran financial writer, owns Advisor Products Inc., a marketing technology company serving 1,800 advisory firms.