The battle over who will regulate investment advisors continues to rage. Dodd-Frank had directed the SEC to conduct a study and gave the agency the right to make rules in this area. The SEC subsequently came out with a proposal to impose a uniform fiduciary standard, as of now undefined, on brokers as well as advisors.

One huge attending issue is who will oversee the advisors and brokers in this new era. Financial advisors certainly do not want FINRA looking over them, as they see FINRA as a stock brokerage-oriented regulator that doesn't understand the modern registered investment advisor business.

At the same time, FINRA is hungry to get into the market, and would like to persuade the SEC to hand over oversight of advisors. To that end, it has hired none other than Michael Oxley, the former congressman who co-wrote the Sarbanes-Oxley Act of 2002. He has registered as a lobbyist for the FINRA and intends to make their views known in Washington, notes Investment News.

This is a huge matter in the advisory business, and the hiring underscores that the stakes are high. Politics has reared its head, as some Republicans question the costs of the SEC proposal and whether a uniform fiduciary standard is in the best interests of the industry.

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