RIA Scrutiny Intensifies

By Michael Wursthorn – WSJ

RIAs under the microscope.  In response to a boom in the number registered investment advisers, or RIAs, the Securities and Exchange Commission has boosted by 20% the number of examiners assigned to monitoring wealth-management firms and investment companies.

The latest move comes as more commission-based brokers are opting to instead give advice as fee-based investment advisers. Analysts say the Obama administration’s new “fiduciary” rule requiring brokers to act in the best interest of retirement savers will accelerate those moves. The SEC expects RIAs, whose ranks have climbed 17% over the past two years to 12,000, will manage more than $70 trillion of assets by the end of this fiscal year, up from $28 trillion a decade ago.

Beefing up the ranks of examiners responsible for overseeing independent advisers means the SEC is assigning fewer examiners to focus on the familiar but dwindling ranks of Wall Street broker-dealers, a group that falls under the purview of the Financial Industry Regulatory Authority, or Finra.