"If there is any bright spot in this bill, it's that the proposed bill calls for more than one SRO, rather than just FINRA as the sole regulator," said Blaine Aikin, fi360′s President & CEO. "However, we still believe that fully funding the SEC with enough resources to oversee the industry is the correct direction."

Fi360 is concerned that Congressional leaders have failed to consider the costs and benefits of such action to investors and small advisers. "A new bureaucracy will increase costs for the vast majority of investment advisors, forcing them to pass on higher costs to consumers and leaving investors with potentially fewer choices in advisory services. Given that the Dodd-Frank-Act-mandated study recommended SEC self-funding, it's unclear why the proposed bill focuses on an SRO option," said the company in a recent statement.

"This proposal creates a new bureaucracy to accomplish what the SEC could handle directly," said Duane Thompson, Senior Policy Advisor for fi360. "The only thing the SEC currently lacks to increase the effectiveness of exams is the resources that self-funding would provide."

Fi360 also notes that if the bill does come to pass, it will be imperative that an alternative to FINRA be authorized as a means to preserving high fiduciary standards for advisory services.

Fi360 is working with the recently formed Self-Regulatory Organization for Independent Investment Advisers (SROIIA) to be prepared for that possibility. SROIIA is positioning itself to be the regulator of choice for advisers who are willing to be held accountable to the bona fide fiduciary standard and fi360 has agreed to provide a fiduciary exam required for SROIIA membership.