AdvisorOne.com Editor-in-Chief Jamie Green has gone way out on a limb by suggesting that I write a blog for his new portal. He’s coached me, the executive director of the Investment Adviser Association (IAA) to be more conversational, more informal, more hip (this is like telling an accountant to make his audit report bristle with excitement). I’m willing to give this blog thang a shot. But please don’t be shocked and dismayed when you see that my meanderings tend to focus on the scene in DC and, specifically, the latest and greatest on laws and regulations that affect the investment advisory profession.
Perhaps a bit of my background will help explain my “inside the beltway” proclivity. I’ve been an attorney since graduating from Jayhawk Law School in 1978. I started out my legal career working in state government (in my home state of Kansas) and moved to Washington, DC on Labor Day weekend 23 years ago. Since then, I’ve either worked for the federal government or, in some capacity, trying to influence it. For the last 14 years, I’ve run the Investment Adviser Association (IAA), a non-profit organization dedicated to representing the interests of SEC-registered advisory firms. It’s our job to interact with federal regulators (the SEC, Department of Labor, Treasury Department, etc.), state securities regulators, international regulators, and – everyone’s favorite, the U.S. Congress–on specific laws, regulations, and policies that affect investment advisory firms.
So what’s been going on in DC? Since the economic crisis of 2008, our organization has been up to our neck in the “reg reform” debate on Capitol Hill. Last year, I had the pleasure of testifying before the Senate and the House (during my time on the Hill, I helped organize many Congressional hearings but this was my first time sitting on the other side of the witness table). During the past two years, members of our organization wrote, called, and visited members of Congress to educate policy makers about the investment advisory profession and to discuss how different proposals would affect their businesses and the clients they serve.
The result of scores of hearings and an intense debate in the House and the Senate was a game-changing piece of legislation called the Dodd-Frank Wall Street Reform and Consumer Protection Act. Unless you have been in a sensory deprivation tank, you know that President Obama signed the Dodd-Frank bill in July. “Dodd-Frank” now refers to more than a lame duck senator from Connecticut and a veteran member of the House from Massachusetts. Dodd-Frank is the law of the land, and what a law it is. Whatever their views on the merits of the legislation–and there are a lot of differing views–no one disputes that Dodd-Frank represents the most far-reaching and significant financial services legislation since the New Deal. At 2,300 pages, the bill authorizes about 250 rulemakings and dozens of studies by U.S. regulators (about 100 rulemakings by the SEC alone).
What Does Dodd-Frank Mean for the Advisory Profession?