Investment advisory trade groups released a review by the Boston Consulting Group (BCG) Thursday refuting the Financial Industry Regulatory Authority’s (FINRA) cost estimates in assuming the role of a self-regulatory organization (SRO) for advisors.
The review, conducted by BCG on behalf of the Certified Financial Planner Board of Standards (CFP Board), Financial Planning Association (FPA), Investment Adviser Association (IAA), National Association of Personal Financial Advisors (NAPFA) and TD Ameritrade Institutional (TDAI), says that FINRA’s one-and-a-half page estimate released on April 25 underestimates overhead costs and overestimates investment advisor examiner productivity.
FINRA issued a statement after the BCG findings were released, which stated that ”until the Boston Consulting Group has at least one conversation with the SEC and FINRA about what it takes to run a nationwide examination program, their numbers should be viewed with skepticism and amusement. They are inventing the numbers out of thin air.”
FINRA released its cost estimates the same day Rep. Spencer Bachus, R-Ala., and Rep. Carolyn McCarthy, D-NY, introduced legislation authorizing the creation of an SRO for advisors. FINRA is said to be the lead candidate in assuming such an SRO role.