U.S. Rep. Zach Nunn (R-IA) recently received unanimous approval from the House Financial Services Committee for his bipartisan legislation designed to remove regulatory barriers facing independent financial advisors.
The committee passed the Clarity for Compensation Act, H.R. 7187, on June 30, a bill that Rep. Nunn introduced in January with lead cosponsor U.S. Rep. Gregory Meeks (D-NY). It now advances to the full House for consideration.
The bill would eliminate restrictions that prevent registered financial advisors from using their own business entities to receive compensation. Current regulations impose requirements on financial advisors that don’t apply to other licensed professionals such as lawyers, accountants, and insurance agents.
“Small-town financial advisors shouldn’t be held back by outdated regulations,” Rep. Nunn said on June 30. “They help families save for college, buy their first home, and plan for retirement. Today’s unanimous committee vote brings us one step closer to giving independent financial advisors the same flexibility other licensed professionals already have — cutting unnecessary red tape so they can spend more time serving Iowa families.”
The congressman explained that the existing restrictions create administrative burdens, increase taxes, and limit options for families seeking financial advice. He added that the regulations make it difficult for small firms to remain independent in rural communities.
The legislation, if enacted, would ensure registered financial advisors receive the same treatment as other licensed professionals when it comes to compensation structures, while also reducing unnecessary compliance costs.
The bill is supported by the Financial Services Institute and Finseca.