Due Diligence

Consumer Protection Agency Will Compete With FINRA


The Consumer Financial Protecion Agency, recently created under Dodd-Frank, will at least partially cover financial advice and brokerage, among other things, says a recent research report by Aite Group. And that means it will compete with FINRA.

"At the very least, retail investors will now have a new avenue to pursue for recourse when they are unaahppy with the financial products and services they receive. It is also well within the realm of possibility for financial adviser registration, examination, and continuing education to fall under the dministration of the CFPA," says the report.

Financial advertising could also be under the agency's purview because it involves interactions between consumers and financial services firms.

What does this mean for retail brokerage and wealth management firms? It could meant tougher regulation in all of these areas. The agency is expected to be tough on firms and very pro-consumer, in part because of who has been appointed to head it: Elizabeth Warren.

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