Another Nail In The Coffin

FINRA posted a loss for 2011.  So what's its response?  Fee increases, pretty much across the board.  At least that is what seems to be the answer according to a story in Investment News.  The plan:

For this year, Finra will be proposing a hike fees for advertising reviews, corporate financing and new-member applications, Mr. Ketchum told members

In addition, a 25% increase in the trading activity fee will be proposed. For next year, Finra will propose an unspecified "regressive tiered rate" for branch office assessments, and hikes in various registration and disclosure fees.

Overall, the proposed hikes range from around 5% to 50%.

This on top of a $36 million budget cut for 2012.  I suspect that its actually a reduction in the budget growth.

These increased costs are being imposed on broker-dealers, who can ill afford to absorb them.  However, if the B/Ds try to pass them on to advisors, another wave will exit the B/d channel and become independent RIAs.  And the downward spiral continues.

Right now, all of the environmental factors favor advisors becoming independent.  What will it take to reverse the trend?