In case you missed it, in November our friends at FINRA graciously offered to conduct testing for RIAs and administer a continuing education (CE) program “to ensure they are proficient in their field, and in the rules and regulations that apply to them.” Isn’t that just downright helpful of the Wall Street self-regulator that oversaw the mess which created the need for massive Wall Street financial services reform in the first place? Now they’re offering to work their magic on the independent advisor world as well. What could go wrong?
Of course, FINRA’s suggestion is far from surprising: Since advisor re-regulation was proposed by the Obama Administration some 18 months ago, FINRA has been angling to become the regulator of RIAs, too. Having apparently accepted a fiduciary duty as a fait accompli from nearly the beginning of the re-reg, FINRA has been anxiously trying to at least control this threat to the securities business as usual. The good news is that those attempts surprisingly seem to have been met with less than enthusiasm at the SEC.
So FINRA regrouped, and came out with a more modest proposal: “As we’re already in the business of broker testing, why don’t we just take over RIA testing as well?” Make no mistake: this new initiative is not at all an indication of capitulation. It’s just a smaller step toward the same goal of adding independent advisors to FINRA’s stable of regulation.