Several lifetimes ago, when I was an editor at Financial Planning magazine back in the ‘80s, we had a problem: advertising sales for the June issue had been falling year after year, to the point that it was hardly worth putting out a magazine.
So the publisher, Herky Harris, and the editor-in-chief, Jack Lange, got together and created an annual Broker-Dealer Survey, which would run every June. Ad sales in that issue increased dramatically—within three years, we sold more ads in June than any other issue, except the IAFP (now the FPA) annual convention issue in October.
After another couple of years, not long after I became editor-in-chief, the new publisher (who shall remain nameless) came to me, bemoaning the fact that ad sales for January were the weakest of any issues. His solution: that we move the BD Survey to that issue, to boost sales, as the ad sales in June were so robust. It was one of the few times in my life when I was literally speechless.
I had a flashback to that meeting as I was recently reading Melanie Waddell’s December 18, 2014 story: “SEC Chief White Pushes Back on Advisor Audits.”
It seems that rather than increasing the SEC’s budget so that it can conduct more RIA exams each year, two leading Congressmen have suggested to Chairman Mary Jo White that the Commission simply reallocate its current resources to get the job done. Apparently, the implication is that the SEC has got all its other areas of responsibility so well under control—capital markets, insider trading, accounting fraud, program trading, monitoring FINRA, criminal prosecutions, corporate filings, complying with all its “new” Dodd-Frank directives, etc., etc.—that it ought to cut back in all these areas to keep a better eye on those rascally RIAs.
The luminaries in question are chairman of the House Financial Services Committee Jeb Hensarling (R-Texas), and chairman of that committees’ Capital Market’s subcommittee, Scott Garrett (R-New Jersey). Back in November, these two Congressmen told Chairman White “that user fees collected from advisors to fund their exams was too costly an option, and that the agency should ‘immediately’ reallocate resources and also consider third-party audits to increase the number of advisor exams.”