FSI Victory: Critical Legislation to Help Protect Financial Advice Signed Into Law

June 17, 2013

The Governor of Florida has signed into law legislation pushed by the Financial Services Institute (FSI) that protects investors’ access to affordable, independent financial advice. 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. FSI worked closely with Rep. Dane Eagle (R-77) and Sen. Jeff Brandes (R-22) in crafting this legislation and Governor Rick Scott signed it late Friday.

“This law is another historic step forward for FSI members, who have united once again to affect positive change,” said Dale Brown, FSI President & CEO. “We applaud the elected officials and the Florida Office of Financial Regulation who all came together with our members 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.”

The law makes Florida a “notice-filing state” for branch office applications. 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
  4. When a firm already operating in Florida opens a new branch office

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 was still unacceptable. This law places the filing system online and mandates approval be automatic, keeping the advisor working and protecting clients’ access to their advice.

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.