The Securities and Exchange Commission's Investment Advisory Committee has put forward a recommendation aimed at addressing the challenges faced by the agency in effectively overseeing investment advisers. The Committee has recommended the implementation of user fees and third-party exams as a means to enhance the SEC's examination rate of investment advisers.
The Investment Advisory Committee has approved a recommendation that calls for the Securities and Exchange Commission to seek legislative authorization from Congress. This would enable the SEC's Division of Examinations to impose user fees on SEC-registered investment advisors (RIAs). The revenue generated through these fees would be retained by the SEC to enhance the investment advisor examination program, including conducting more frequent on-site examinations of SEC-registered advisors.
During discussions held in March, the IAC explored various alternative approaches to strengthen oversight of SEC-registered advisors. These included delegating more oversight responsibilities to state regulators, establishing a self-regulatory organization for RIA examinations, granting FINRA the authority to examine firms dually registered as broker-dealers and RIAs, and allowing third-party examinations of RIAs.
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