Critical Legislation Will Help Protect Financial Advice in Florida

April 10, 2013

The state of Florida is one step closer to protecting investors’ access to affordable, independent financial advice, thanks to legislation that passed a key committee late yesterday. While this pertains to Florida, the implications are nationwide, since it affects every financial services firm with affiliated financial advisors in Florida, regardless of where the firm is headquartered.

The Florida state Senate Banking and Insurance Committee unanimously passed SB 814 which, when signed into law, will make Florida a “notice-filing state” for branch office applications. The House Regulatory Affairs Committee already unanimously passed the companion bill on 4/4/13. The Financial Services Institute (FSI) worked closely with the bill sponsors in crafting this legislation.

Florida becoming a notice-filing state is critical for our industry and investors because financial advisors have been forced to close down for extended periods of time, losing revenue and denying clients access to their advice, due to their applications not being approved in a timely manner. Some scenarios of when advisors need to re-file, or file for the first time, which cause the problem includes:

  1. When an advisor changes broker-dealer affiliation
  2. When an advisor moves his current office address to another address
  3. When a firm – operating in another state – wants to open a new branch office in Florida

While FSI has been working with the Florida Office of Financial Regulation (OFR) for some time, and has cut the approval process from weeks to four-to-five days, the timeframe is still unacceptable. This legislation, once signed into law, would place the filing system online and mandate approval be automatic, keeping the advisor working and protecting clients’ access to their advice.

“This is a significant step forward for the bill, and another historic step forward for FSI members, who have united once again to affect positive change,” said Dale Brown, FSI President & CEO. “Our members have met with state officials, sent letters and emails and have worked constructively with a friendly regulator eager to make a positive difference. This is exactly how government/private partnerships should work to serve our mutual constituencies. And it shows how much FSI’s members can accomplish when they work together and speak with one voice.”

After working with OFR to find common ground on the legislation language, FSI agreed to language that makes Florida a notice-filing state, but allows OFR to require BDs to resolve deficiencies in their filing within 30 days. OFR now supports the legislation that passed committee yesterday. FSI hopes to see the final legislation passed by both the full House and Senate in the next few weeks and signed by the governor before Labor Day.