12/13/2009

ADVOCIS ADVISOR/DEALER SURVEY ON MUTUAL FUND REGULATION

Some noteworthy survey results:


Many financial advisors have seriously considered dropping their mutual fund license due to the compliance burden on licensed mutual fund representatives.


Very few respondents to the Advisor Survey consider that the MFDA is receptive to the views and concerns of advisors.


Dealers consider that the sales compliance audit process and the financial compliance audit process help them to understand deficiencies in their regulatory compliance and practices, and to meet dealer and SRO requirements.


A preponderance of the dealer respondents agreed that "The MFDA's current rules place disproportionate or excessive compliance burdens on small dealers as compared to large ones."


All of the dealer respondents who expressed an opinion on the question agreed that "The way things are going, it won't be long before there will only be a few large mutual fund dealers and the Bank or insurance-owned firms."


Seg fund requirements are clear


More respondents find the regulatory and compliance requirements for selling segregated funds to be clear and straightforward, and understand them, than is the case with the regulatory and compliance requirements for selling mutual funds.

More than three quarters (76.5%) of all respondents agreed
or agreed strongly, that the regulatory and compliance requirements for segregated funds are clear, straightforward and understandable. Only twelve percent (11.9%) did not agree. (Q3)


"Unfortunately the MFDA regs do little to protect clients, as risk tolerance is so highly subjective. The process is more about having the proper paperwork done and very little about consumer protection..." (Advisor response)

From Advocis 12/13/2009

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