Dale Brown took a deep breath before launching into a discussion of the state of regulation. Who can blame him? Appearing in our annual Broker-Dealer Career Guide is old hat for Brown, president and CEO of the Financial Services Institute, and it is an election year, so at this point it’s a topic he can repeat in his sleep. Still, what he has to say is of critical importance to our readers and the viability of their business, and he was more than happy to detail the advocacy organization’s efforts on behalf of its members.
“I want to emphasize that we are not a partisan organization,” Brown diplomatically began. “It doesn’t matter if a Democrat or Republican won the election; quite frankly, we’d be having the same conversation if Romney won.”
But Romney didn’t win, and Brown continued, “With that said, as an organization, we have to be politically astute enough to recognize the current political realities and plan accordingly.”
Like many political observers, he called the election a vote for the status quo; a vote to keep a Democrat as president and to increase their hold of the Senate, but at the same time to ensure a divided government with Republicans retaining control of the House.
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“This means elected leaders certainly have some challenges, gridlock being among the most obvious,” Brown added. “For broker-dealers and advisors, it means there won’t be a lot of relief from the horrendous regulatory environment, at least not in the near term.”
As for where FSI will focus its efforts in 2013, not much will change from 2012, according to Brown. The organization will continue to engage politicians on relevant legislation affecting financial services firms. Specifically:
– Worker classification: “We’re concerned about the ability to maintain the independent contractor status, and have been for some time. There’s a possibility it might get swept up as part of a ‘grand bargain’ having to do with some other unrelated piece of legislation.”
– Definition of fiduciary: “We were able to secure a short-term victory when the Department of Labor withdrew its proposed fiduciary rule. But we anticipate the re-proposal of the definition of fiduciary sometime in 2013.
– Dodd-Frank: “There are several aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act that we’re watching closely. We’re also keeping an eye on a new uniform fiduciary standard from the SEC, and there’s still plenty to be done with rule harmonization, over and above the SRO issue. But we think a lot of this could be a net positive.
“Ultimately, we will continue to ensure our members have a seat at the table on regulatory matters that affect them,” he stated.
Brown also addressed FSI’s “five-year plan,” currently at its midpoint.
“We undertook [the plan] to ensure we are the most effective organization we can be in representing the views of our members in Washington,” he said. “We will continue to execute on that plan, but make tweaks and adjustments as necessary.”
He noted the organization’s 100 member firms and 35,000 financial advisor members, a membership trend he feels can be sustained.