In January, the GAO issued a study that took a pass on regulating the financial planning profession, saying it did not have enough information to form one.
Perhaps they will think differently after the summer is over, after TD Ameritrade Institutional wraps up a high-level study on advisor oversight.
The asset custodian has teamed up with Georgetown University’s James J. Angel, an associate professor at its McDonough School of Business who has built a name in financial regulation, on the project.
The research will examine various proposals for regulating investment advisors. The Jersey City, N.J.-based asset custody and advisor services firm is determined to give each option a thorough, balanced look, be it continued regulation under the SEC, new oversight from FINRA, a custom-built self-regulatory organization for advisors or examinations that are outsourced to the accounting profession.
“We are agnostic in terms of who the regulator is, but I have very strong feelings as to how it should be set up and run,” Tom Bradley, president of TD Ameritrade Institutional said in a telephone interview. Whatever form the oversight takes must be run in a businesslike way. “It should be efficient and effective and have highly qualified examiners who have great training.”
Specifically, those examiners should be able to go into an advisory firm and do the kind of work that protects investors, and not disrupt the firm’s everyday business of serving those savers and investors, Bradley said.
Among other questions, the report will delve into training programs for inspectors. What are the qualifications? What does the exam program look like? Are they looking for the big things like fraud?
“All of that is all very important,” Bradley said. But the study will ask practical questions, too. “You have to figure out who pays for it.”
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