June 29, 1993
TO: INVESTMENT ADVISERS COMMITTEE NO. 18-93
OREGON ASSOCIATE MEMBERS
RE: OREGON INVESTMENT ADVISERS BILL
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The Oregon legislature is considering the attached bill, which would make
two key changes to the regulation of investment advisers. First, the bill would
exempt investment advisers without discretionary authority from the bonding
requirements of the Oregon Securities Law. Second, the bill would require the
registration of "fee only financial advisors." The term "fee only financial
advisor" generally would include those who, for compensation, engage in financial
planning, accept compensation for services by hourly, flat, or percentage fees,
have a fiduciary relationship with the client, and do not receive compensation
for recommending specific products or courses of action. The term would exclude
licensed broker-dealers, investment advisers, or salespersons whose performance
of the described services is incidental to the conduct of their business and who
receive no special compensation for the services.
The bill would require every registered fee only financial advisor to be
a licensed investment adviser and to hold a Certified Financial Planner
designation or equivalent qualification as determined by the Director of the
Department of Insurance and Finance. The fee only financial advisor would have
to furnish clients with a written disclosure statement describing how the fee
will be calculated and collected. The Director would have authority to require
that fee only financial advisors maintain certain books and records. Finally,
the bill would exempt fee only financial advisors from the Oregon Insurance Code.
The legislature's session is expected to end sometime in July.
Thomas M. Selman
Assistant Counsel
Attachment