SEC-registered investment advisors are examined on average once every ten years, according to David Tittsworth, executive director of the Investment Adviser Association in Washington. "We agree we need more inspection, but the self-regulatory organization route isn't right," he said.

'Lack of Transparency'

Tittsworth, whose group represents registered investment advisors, said the SEC should be given "the resources it needs to do its job." He said his group strongly opposes Finra stepping in to oversee about 7,000 advisors, because it has "a lack of accountability and a lack of transparency." He said he'd prefer advisors pay user fees to the SEC to fund additional oversight.

Because of the SEC's budget trouble, oversight for independent registered investment advisors "would be enhanced by a self-regulatory organization," Ira Hammerman, senior managing director and general counsel for Sifma, said in a January 12 letter to the SEC. If there is a self-regulator, there must be a "fresh start" in how the examination program would work for the advisor model, Hammerman said.

The study on regulation is due Monday, according to the act. Since that's a federal holiday, it could be released Tuesday. It didn't come with congressional authorization to write a rule, so the matter would return to Congress for any potential legislation.

A third study due January 21 is supposed to make recommendations on "ways to improve the access of investors to registration information" on investment advisors and brokers.


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