Last year, the [Financial Planning Coalition] released a study conducted by Boston Consulting Group estimating high costs if FINRA were to become the SRO: $200 million to $250 million in startup costs and $460 million to $510 million for ongoing operations. The coalition says these expenses could be passed on to advisors in annual fees to the tune of $51,700, or much more, per firm, depending on its size. By comparison, FINRA recently released a two-page document with much lower estimates: $12 to $15 million in startup costs versus $150 to $155 million in ongoing operating costs. The new review comes in response to these FINRA numbers.

"They have left out important accounting of costs," Marilyn Mohrman-Gillis, the CFP Board's managing director of public policy and communications, said as she was on her way to meetings on the matter with members of the U.S. House of Representatives Financial Services Committee. "It would seem to us that they are drawing on their existing oversight operation. This raises concerns that a FINRA SRO would be truly independent." Read more >

Financial Planning
Ann Marsh
May 10, 2012