FINRA Drops Push to Review Registered Investment Advisors

Posted by adaniels in Blog on February 12, 2013

FINRA recently announced that it was backing off — for now — on its initiative to control U.S. registered investment advisors, WealthManagement.com reports. Richard Ketchum, the agency’s chairman said: “I’m not a big believer in beating a head against the wall,” and said that FINRA would “focus on things we can impact.”

This change in strategy was due to the U.S. Congress not planning on changing regulations regarding investment advisers. Right now, the Securities and Exchange Commission regulates the advisers, but because of budgetary constraints, they only get the chance to look at the advisers approximately once every 11 years.

However, FINRA did not permanently drop seeking the ability to take over reviewing registered investment advisers.  It called it a “critical investor protection,” but said that there was “clearly a lack of consensus about how best to address that problem.”

Congress has shown no interest in changing who reviews registered investment advisers. The agency said that “other issues are closer to the top of Congress’ agenda, so this one will likely not be resolved in the near term,” but it hoped that the legislative body would review the issue in the future.

Written by Lisa Swan

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