More On Legal & Compliancefrom The Advisor's Professional Library
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
Daniel Penchina, principal at The Raben Group in Washington and the Financial Planning Association’s advocacy point man in Washington, feels good about FPA’s access to decision makers inside the Beltway.
“Financial planners are well liked on the Hill,” Penchina said in an interview May 5 during the FPA Retreat 2013 in Palm Springs, Calif. More pointedly, he said that House Financial Services Committee staffers “have a good understanding of the issues” that FPA cares about, such as the fiduciary standard for all advice-givers and funding the SEC’s exam efforts through user fees.
When asked if FPA is hamstrung by its relatively low-balance political action committee, Penchina said that “money doesn’t buy access, especially in the days of the Super PAC,” but that FPA will continue to “support members of Congress who support us.”
Penchina said it would be “interesting” to see how the new chairman of the Financial Services Committee, Jeb Hensarling (R-Texas), who has made known his negative feelings on Wall Street, steers the committee on items of interest to the FPA. However, Penchina said, “housing finance will likely be his top priority,” suggesting that a possible bellwether will be to see “how the confirmation hearings go” for the proposed new head of the Federal Housing Authority (FSA) in the Senate.
On the legislation sponsored by Rep. Maxine Waters (D-Calif.) that would allow the SEC to impose user fees to fund the agency, Penchina said that “user fees have a chance,” but that “we’ve still got a fairly contentious Congress.” That contentiousness seems to have dissipated somewhat when it comes to tax reform, however, particularly in the House Ways and Means Committee, so he remains optimistic about the user fees legislation, especially if the bill gets a strong supporter in the Senate and becomes part of broader legislation.
“It’s somewhat on the periphery,” he said, referring to user fees, but since the planning industry itself supports more regulation of advisors, and since it would be “revenue neutral, politically there’s a lot of good there.”
Over all, however, when it comes to implementing the Dodd-Frank Act, on which “there’s so much still to be done,” Penchina said flatly, “it’s a bandwidth issue” for the Congress. After all, he said “Congress tends to be reactive,” as shown by the passage of Dodd-Frank after the financial crisis, and in its advocacy efforts, “you don’t want to use scare tactics.”
As for the FPA’s specific efforts on behalf of members, Penchina said “We’ve got a new focus on supporting the state FPA associations,” specifically by providing “tools to be better advocates on the ground” in their own states.
He pointed to initiatives in Ohio and Minnesota, where legislation has been proposed that in addition to a financial services tax, “they’re talking about a tax on financial planning” services. That sends the wrong message to consumers, he argued, since in a time when consumers are responsible for planning goals such as retirement, “there should be incentives to use financial planners.”
See Washington Bureau Chief Melanie Waddell’s late April article on the FPA’s advocacy pushes off an interview with the association’s leadership.