Registered investment advisors may be more inclined to trust the devil they know vs. the one they don't when it comes to what agency should oversee their industry, according to a survey of RIAs to determine which of three oversight agency scenarios they would prefer.

According to a survey conducted by the Boston Consulting Group (BCG), more than 80 percent of RIAs queried said they would prefer to pay user fees to fund what is described as "an enhanced Securities and Exchange Commission oversight, than the two other options now on the table that several SEC supporters contend would dramatically increase RIAs' annual fees.

Creating a new self-regulatory organization that would be operated by the Financial Industry Regulatory Authority (Finra) would cost at least twice as much as leaving the responsibility to regulate RIAs with the SEC, according to a study funded by four groups representing RIAs.

Beefing up the present SEC program to inspect RIAs would cost $240 million to $270 million a year, according to the BCG study, but empowering Finra to be the SRO for RIAs would cost an estimated $460 million to $510 million.

Annual funding for a third option, creating a new SRO for investment advisors, would cost between $515 million and $565 million, the consulting group said.

The survey was commissioned by the Certified Financial Planner Board of Standards (CFP Board), the Financial Planning Association (FPA), the Investment Adviser Association (IAA), the National Association of Personal Financial Advisors (Napfa), and TD Ameritrade Institutional.

Highlights of the survey were outlined at a press conference in New York today. The groups did the survey in response to calls for more analysis of the recommendations in an SEC study mandated under Section 914 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Released last January, the SEC study examined three options for increasing the frequency of RIA examinations: Authorize the SEC to collect user fees from SEC-registered RIAs to fund their examinations; authorize one or more SROs to examine all SEC-registered RIAs, subject to SEC oversight; or authorize Finra to examine dual registrants for compliance with the Investment Advisers Act of 1940.

CFP Board officials contend that RIAs would prefer to keep the SEC as its overseeing body and oppose either of the other two options, claiming that both would likely cost at least twice as much choosing to fund an enhanced SEC examination program.

"We firmly believe that the SEC should retain oversight of investment advisors and be given the tools to adequately do the job, including the option of imposing user fees, which will be the most appropriate and cost-effective way to achieve the most important goal -- protecting investors," said Kevin Keller, CEO of the CFP Board.

The cost analysis was based on the assumption that RIAs would be examined on average once every four years. BCG relied on publicly available data, research, studies and reports, as well as in-depth interviews with RIA firms and former regulatory officials, among others. The SEC and Finra did not sponsor the study and were not asked to participate in it..

Funding an SRO would likely cost investment advisors at least twice as much as paying user fees to the SEC, according to BCG figures. The average annual fee per RIA firm is projected to be $27,300 for a full "enhanced SEC" examination program; $51,700 for a Finra investment advisor SRO; and $57,400 for a new RIA SRO.

"Let's be clear -- enhanced investment advisor oversight is needed," said David Tittsworth, executive director of Investment Adviser Association. "But giving the job to Finra would be the wrong choice for many reasons, including its lack of accountability, lack of transparency, weak track record, excessive costs, and its bias favoring the brokerage

Susan John, 2010-2011 Napfa chair, said that since most of it members are small business owners, they're keenly aware of the likely disparity in funding costs between the SEC, Finra or a new SRO. "We are unwilling to support a new layer of bureaucracy that would burden our member firms and further confuse consumers," she said.

However, not all industry organizations are jumping on the SEC bandwagon.

"The simple fact is, Finra is the only entity with the capacity, funding and know-how to effectively examine retail investment advisors, which is not happening now," said FSI President and CEO Dale E. Brown. "When the SEC's own chair and commissioners acknowledge that an SRO is necessary, and that the SEC can't do the job, then it doesn't make much sense to keep pushing the improbable. The status quo simply continues to keep investors at risk."