In a move expected to draw the ire of some advisors, House Financial Services Committee Chairman Spencer Bachus (R-Ala) introduced legislation in the house Wednesday that could clear the way for FINRA to become the self-regulatory organization for retail investment advisors.

The bill is co-sponsored by Rep. Carolyn McCarthy (D-NY). A bipartisan bill increases the likelihood it may be able to make it to the Democratic-controlled Senate this year.

The Bachus-McCarthy bill would authorize one or more self-regulatory organizations (SROs) for investment advisers funded by membership fees. Investment advisors and broker-dealers often provide indistinguishable services to retail customers, yet only 8% of investment advisors were examined by the SEC last year compared to 58% of broker-dealers.

This discrepancy has lead even some long-time opponents of FINRA assuming this power to conclude that it might be preferable to having widespread lack of oversight continue.

“Having spent the better part of two decades arguing for various approaches to increase SEC resources for investment adviser oversight with nothing to show for our efforts, we have been forced to reassess our opposition to the SRO approach,” Barbara Roper, director of investor protection for the Consumer Federation of America testified before the Senate last year. “Specifically, we have concluded that a properly structured SRO proposal would be a significant improvement over the status quo.”

The National Association of Insurance and Financial Advisors - whose interests often are not aligned with CFP Board, NAPFA and FPA - has hailed the introduction of the bill. The Financial Planning Coalition, composed of those organizations, has come out against the Bachus-McCarthy bill.