FSI Secures Major Victory Protecting Independent Contractor Status of California Financial Advisors
August 18, 2011
FSI is pleased to report we successfully advocated for the adoption of amendments to California Senate Bill 459 (Corbett). As a result of the amendments, independent broker-dealers and independent financial advisors will no longer have to worry about increased compliance burdens and increased costs, that would have been imposed on them if the bill passed unchanged.
The recent amendments removed the notice and record keeping requirements for all independent contractors in California. The amendment replaces these requirements with a notice requirement via a website or office posting only for firms found that have engaged in willful misclassification of independent contractors. Due to proper classification of independent financial advisors as independent contractors, the independent broker-dealer industry will not have to concern themselves with SB 459 any longer.
“This is a big win, not only for our California broker-dealers and financial advisors, but for all broker-dealers and advisors in other states that were watching to see what happened in California before they acted,” said FSI President & CEO Dale E. Brown. “This win will hopefully temper any thoughts from other state legislatures about going down a path that will ultimately hurt hard-working Americans’ ability to secure affordable, unbiased financial advice, especially during these hard economic times. We thank our numerous broker-dealer and financial advisor members who really stepped up to the plate and took this issue head on from a grassroots campaign effort. We couldn’t have done this without them.”
Throughout the spring and summer months, FSI has been in the thick of the fight, with FSI’s Government Affairs Counsel Matt Schwartz leading our considerable advocacy effort, participation in a coalition of like-minded advocacy groups and well over 500 financial advisor members responding to our Calls to Action by writing letters to their assemblymen to express their concerns. In addition to the letter writing campaign roughly 25 members have volunteered to participate in face-to-face meetings with their assemblymen, coordinated through FSI.
FSI has also brought significant public attention to the matter through the media. You may read a sampling of the coverage of our efforts in Investment News, AdvisorOne (part 1 and part 2) and in Registered Rep Magazine.