Congressman Barney Frank (D., MA) won't push for a self-regulatory organization (SRO) to oversee registered investment advisors (RIAs) unless they want one, according a published report.

Frank, chairman of the House Financial Services Commitee, 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 has the likely candidate to be 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."