Regulatory reform was on the top of everyone’s minds at the Women Advisors Forum in New York City on Thursday.

Marilyn Mohrman-Gillis, the managing director of public policy and communications for the Certified Financial Planner Board of Standards, gave a keynote address entitled “Dodd-Frank and You" that revealed how the regulatory landscape impacts financial advisors.

Since Dodd-Frank became law in July, Mohrman-Gillis said the state of the country has changed vastly. Leading up to the passage of Dodd-Frank, the country was in the midst of a crisis that exposed the defects in the financial system. The Madoff scandal had politicians scurrying to show their constituents they were angry and wanted change.

“This created a brief regulation-friendly window that allowed Dodd-Frank to pass with bipartisan support,” she said. “Now less than a year since it passed the environment has changed dramatically.” The Tea Party has gained traction in the midterm election and now the focus of the country is about reducing the deficit, she added. “It’s a politically charged legislative environment.”

This is bad timing politically if you are a fan of the Dodd-Frank reforms because there is a lot of work that still needs to be done to make sure the reforms are implemented. Yet financial reform is caught in a monumental crossfire, Mohrman-Gillis said.

“There’s a crossfire between Democrats and Republicans, between those who want to expand and those who want to eliminate Dodd-Frank, those who want more regulation and those who want less, and those who are okay with raising taxes and those who are not,” she explained.

Another issue that broker-dealers and registered investment advisors are abuzz about is harmonization, the attempt to “harmonize” regulations for both RIAs and B-Ds to benefit investors.

There are still many questions on the top of the industry’s mind: Will there be a uniform fiduciary standard? If so, when will it be implemented? Will there be more studies? Who will undertake them? “The problem is the SEC is strapped for resources,” Mohrman-Gillis said.

And with the intense political pressure against regulation, even more resources are necessary. Mohrman-Gillis pointed out that there is a strong likelihood that Dodd-Frank will be challenged in court. While the SEC said it would not go through with rulemaking until the end of 2011, she said, the CFP Board hopes that the SEC concludes rulemaking by 2012: “The SEC is hearing a lot of voices on the opposition.”

There is also a lot of confusion about oversight of investment advisors. Who is going to be the regulator for RIAs? Will it continue to be the SEC, an SRO, or FINRA?  Under Dodd-Frank the SEC released a study of the industry and advisor community and realized that current oversight is “woefully inadequate.” “Even with the switch of 4,100 advisors from Federal to State oversight, the anticipated growth in the number of advisors that would be regulated by the SEC would outpace SEC funding and its ability to provide examinations.”

“The SEC needs more stable funding to meet the needs of the industry,” she added.

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