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January 28, 2014 at 04:12 AM
The Financial Services Institute started 10 years ago “because of need … our members needed a voice” in Washington, Dale Brown, president and CEO of FSI, told reporters at an early Tuesday morning briefing at the OneVoice2014 conference in Washington.
FSI “filled that void and our members saw the potential that we were going to survive and be credible,” Brown said. Since launching a decade ago, advisor and broker-dealer members “have gotten on board in a big way.” Indeed, this year’s OneVoice, FSI’s conference for its broker-dealer members, drew nearly 800 attendees.
Brown credits FSI’s success in growing its membership — which now includes 37,000 advisors and more than 100 BD firms — to its laser-focused mission. “From day one” FSI has had a “clear focus of advocacy,” Brown said. “We aren’t trying to compete with other organizations” in the advisor and BD space. “Our core focus is advocacy — that clarity of mission has been critical.”
Among FSI’s 2014 advoacy priorities for 2014 is “improving” BDs’ primary regulator, the Financial Industry Regulatory Authority,” said David Bellaire, FSI’s executive vice president and general counsel, at the briefing. FSI not only wants to see “greater efficiency” in FINRA exams and in the arbitration process, but it wants to see the self-regulator use cost-benefit analysis in rulemaking.
“Our members are deeply frustrated on a variety of fronts; they feel the compliance burden is real and has consequences for their clients,” added Brown.
“Later this year, FSI will publish a white paper proposing a number of improvements to FINRA’s arbitration system,” Bellaire said.
Added Brown: There needs to be “greater transparency in FINRA’s finances and cost-benefit analysis.”
FINRA CEO Richard Ketchum told lawmakers in a Jan. 6 letter that the self-regulator is now developing rule changes that would prohibit settlements conditioned on an investor’s agreement not to oppose the expungement of brokers’ black marks from FINRA’s BrokerCheck.
Ketchum told Sens. Jack Reed, D-R.I., and Charles Grassley, R-Iowa, that “while the suggestion to include such conditions in exchange for additional compensation does not always originate with the brokerage firm or broker, this practice may interfere with arbitrators’ ability to independently determine the appropriateness of expungement and make the requisite affirmative finding.”
