Ron Rhoades is not going to sugarcoat this: FINRA is a failed organization that has no business stepping into the role of regulating RIAs. Witness some of his recent tweets (@140limited):

“The BIG GORILLA called FINRA wants to "regulate" all (both SEC and state-registered) RIAs. In reality - BDs want to destroy trusted advisors.”

“How many small businesses will fail, and millions of consumers suffer, if FINRA fees/ bureaucracy imposed on all RIA professionals?”

“FINRA is a 73-year old FAILED experiment. Don't reward FINRA for its many recent documented failures - DISBAND FINRA instead.”

It’s fiery rhetoric from a lawyer, college professor and financial advisor who in person speaks in a gentle Southern accent honed from years of practice in Florida, a man colleagues describe as a “teddy bear.” FINRA declined to comment.

Rhoades, 54, is about to get more visibility in his role as RIA advocate. After three years on the board, NAPFA has elected him the organization’s chair, effective Sept. 1. It comes at a watershed period for the RIA industry.

State regulators and the Securities and Exchange Commission currently share oversight of RIAs, but in truth the SEC has resources to fully examine advisor practices only about once a decade.

The Investment Adviser Oversight Act of 2012 was introduced into U.S. House of Representatives last month by Rep. Spencer Bachus (R., Ala.), who chairs the Financial Services Committee, and Rep. Carolyn McCarthy (D., N.Y.). The proposed law would allow one or more self-regulatory organizations to oversee RIAs. No groups were named, but FINRA is actively seeking the responsibility. FINRA is the current regulator of broker/dealers.

FINRA is anathema to many in the RIA business; Some consider it pro-broker and question how fairly it would handle RIA constituents. The Financial Planning Coalition, an umbrella group representing NAPFA, the Financial Planning Association and the Certified Financial Planner Board of Standards, has suggested boosting SEC funding to allow it to handle more RIA examinations.

As the various interest groups prepare for tough lobbying in Congress, some on the RIA side wonder if they’re making their strongest case.

Knut Rostad, president of the Institute for the Fiduciary Standard, a Virginia-based not-for-profit, says investors across the country will be affected by the outcome. Yet Rostad says there isn’t a national debate on the subject, partly because it isn’t understood well by the public. Fiduciary advocates have fallen short of making the case to “the milkman in Kansas City, who should be our target audience,” he says.

“I think by and large we have not done a very good job of that. For the public as a whole, this issue doesn’t exist the way other public policy issues exist,” he says. “It is by its nature a legal issue, and it has not been popularized completely, although we’ve come close. … With certain examples of where Goldman Sachs has come into the news, I think it comes closer to being a public issue.”

Rostad sees Rhoades as someone with the skills to engage on the issue.

“He is academic by nature, but has spent most of his life as a practitioner of the trade. Ron understands the law and the realities of a practitioner like no one else,” he says. “He starts with the proposition that the challenge is not to change the standard to fit the practitioner regardless of the business model. The challenge is to have the practitioners, regardless of the business model, adjust to meet the standard.”

Can Rhoades make the case to the milkman?

“As he said when he got the teaching job, one of his strengths is that he wrote a lot, and one of his weaknesses was that he wrote a lot,” Rostad said. (Rhoades, in fact, has published “The Seven Secrets of Investing,” a booklet on the art that is available on line at Alfred State College in New York, where he teaches financial planning.)

His CV is broader than most practitioners. A practicing attorney in Florida for 25 years, Rhoades specialized in estate planning, transfer taxes and retirement. He and three CPAs formed an RIA, Joseph Capital Management, in 2001.

He left the practice after getting the teaching job at Alfred in the fall of 2011, though he keeps his hand in the game: He has a small practice, ScholarFi Inc, with about 20 former clients and $25 million in assets.

Rostad said Rhoades helped pull together about two dozen academic articles on the fiduciary rule and edited them into a singular tome “The Fiduciary Reference” which was given to the SEC in 2010 when the agency asked for comments on its study of the regulation of investment advisors and broker dealers.

Rhoades expects he’ll be in Washington several times this year to lobby on behalf of NAPFA’s position regarding the Bachus bill. “My specific role is not yet defined,” he says. “This is not a one-man show. This is a team effort at NAPFA and with the other organizations.”