Both sides of the regulatory equation were on display during a Sunday morning session at FPA Denver 2010.
During the Q&A that followed a presentation on the implications and implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the audience applauded twice. The first time came after an advisor stepped up to the microphone and pleaded, in essence, for less regulation, which he suggested was strangling his firm’s prospects for growth. The second, presumably from different people in the near-standing-room audience, came when one of the panelists, Barbara Roper of the Consumer Federation of America, replied to said advisor by saying, “I can’t believe this same argument is still being used after the entire worldwide financial system nearly collapsed.” A second member of the panel, which this writer moderated, Joe Borg of the Alabama Securities Commission, added that “I can’t have one set of rules for the good people, and another for the bad.”
The third member of the panel, the FPA’s director of government relations, Dan Barry, kicked off the hour-long session by explaining that with Dodd-Frank, the Congress had “recognized the complexity” of the issues that Dodd-Frank sought to address, by allowing federal agencies like the SEC and the General Accounting Office (GAO) to implement the intent of Congress on everything from extending a fiduciary standard of care to brokers to determining if, and whether, a new SRO should be set up for all advisors.
The panel focused on three main processes taking place under Dodd-Frank: the fiduciary standard of care study by the SEC; the switch from SEC oversight to state regulation, which was expected to affect more than 4,000 RIA firms; and the GAO financial planning study to determine if there should be an independent oversight panel for advisors.
(The FPA’s newly redesigned website includes in its Government Relations section a readable summary of the implications for advisors of Dodd-Frank.)