FSI Applauds Protection of Independent Contractor Status for Financial Advisors in California
Recently, California Governor Gavin Newsom signed into law Assembly Bill 5 (AB 5) which codifies the decision of the 2018 Dynamex decision by the California Supreme Court, providing a strict test for companies classifying workers as independent contractors, but providing clarity and a path for businesses, such as the independent financial services industry, seeking to properly classify workers as independent contractors.
Below is a comment from Financial Services Institute (FSI) President & CEO Dale Brown:
“We thank the California legislature and Governor Newsom for recognizing the unique nature of the independent financial advisor model and ensuring independent financial advisors in California remain appropriately classified as independent contractors. FSI firm members have a long history of properly classifying their affiliated financial advisors as independent contractors under federal and state law. Independent financial advisors choose this model because their independence allows them to better meet the needs of their clients, however, laws and regulations require oversight by their affiliated broker-dealer firm. The clarity and certainty provided by California AB 5 allows independent financial services firms and advisors in the state to move forward in confidence and continue to best serve their clients and helping their clients achieve their financial goals.”
FSI has worked with the bill’s sponsor, Assembly Member Lorena Gonzales. FSI also held a California State Capitol Day in May for members to meet with California legislators to discuss the importance of their independent contractor status.
About the Financial Services Institute (FSI): The Financial Services Institute (FSI) is the only organization advocating solely on behalf of independent financial advisors and independent financial services firms. Since 2004, through advocacy, education and public awareness, FSI has successfully promoted a more responsible regulatory environment for more than 100 independent financial services firm members and their 160,000+ affiliated financial advisors – which comprise over 60% of all producing registered representatives. We effect change through involvement in FINRA governance as well as constructive engagement in the regulatory and legislative processes, working to create a healthier regulatory environment for our members so they can provide affordable, objective advice to hard-working Main Street Americans. For more information, please visit financialservices.org.
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