Citing the Securities and Exchange Commission's "abysmal examination record" on investment advisors, Rep. Maxine Waters, D-California, has called for a hearing to consider "various legislative proposals" to boost the number of advisor exams.

One of the proposals that Waters, ranking member on the House Financial Services Committee, said should be considered is H.R. 1627, the Investment Adviser Examination Improvement Act, authored by Waters and Rep. John Delaney, D-Maryland.

Waters' bill, which has been co-sponsored by 17 of the 28 Democrats on the committee and would authorize the SEC to collect user fees from advisors to improve examination frequency, has been languishing in the House since she reintroduced it last April.

Waters noted that her bill has been endorsed by the SEC's Investor Advisory Committee, the advisor community and investor advocates.

In a letter to the committee's chairman, Rep. Jeb Hensarling, R-Texas, Waters wrote that "even though the SEC is responsible for overseeing 11,000 advisors that manage nearly $50 trillion in assets, the agency examines these advisors only once every 12 years, and 40 percent of advisers have never been examined."

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Melanie Waddell

Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2023. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.