The Financial Planning Association is seeking to resurrect the concept of allowing the Securities Exchange Commission to collect fees to fund financial advisor exams. In the first annual advocacy event at the federal level, over 60 FPA members will be meeting with over 25 members of Congress on Monday and Tuesday to discuss a range of regulatory, legislative and compliance issues facing advisors.
One issue the FPA is focusing on during the meetings is reviving the user fee legislation initially proposed by Maxine Waters (D-Calif.). Waters introduced the “Investment Adviser Examination Improvement Act of 2013,” last April, but the bill hasn’t made it out of committee. The proposed legislation—which is an updated version of her 2012 bill—called for more advisory firm examinations by allowing the SEC to charge investment advisors an annual fee. GovTrack currently only gives H.R. 1627 a 1% chance of getting past committee.
In addition to moving the House bill forward, the FPA is working with its coalition partners—the CFP Board and the National Association of Personal Financial Advisors—to push for the introduction of a parallel, bipartisan bill in the U.S. Senate. FPA’s 2014 Chair, Michael Branham calls user-fee funding a “common sense solution." The user-fee funding mechanism is the right way to go, he added, especially in light of the House's disappointing decision to approve a 1.4 billion funding measure for the SEC's fiscal 2015—$300 million less than President Obama's $1.7 billion budget.
While this isn't the first time the FPA has raised the issue, the organization is hoping that the discussions will highlight the matter and help get it right. No timeline was given for when advisors might expect a proposal to move forward in the Senate.
Along with the user fee legislation, FPA members will also be discussing the expansion of the fiduciary standard and the Department of Labor’s expected proposal of a new fiduciary definition under ERISA, as well as state legislative issues such as consumer taxes on financial advice.
Branham calls the FPA's advocacy efforts this week a part of establishing a lasting relationship. “Not that we haven’t felt heard, but we’re a relatively small organization and we have to stay relevant,” Branham says. “We know there has to be a constant back-and-forth, a constant flow of information.”