In the two months since financial-reform legislation became law, the measure has failed to win over the vast majority of investment advisers.
Others said that they are just plain confused by it.
President Barack Obama signed the 2,300-page legislation July 21, ushering in the most dramatic overhaul of the financial system since the Great Depression. The president set in motion a massive regulatory process that likely will lead to the implementation of hundreds of new rules over the next few years.
Investment advisers don't seem overly thrilled by the changes.
According to a recent survey of 500 advisers, 51% oppose Dodd-Frank. Another 28% responded that they don't know enough about the measure to form an opinion.
ByAllAccounts, which aggregates financial ac-counts, conducted the survey, which was released Sept. 15.
The skepticism toward Dodd-Frank may reflect a general wariness of increased regulation rather than a backlash against particular provisions, which are too numerous for many advisers to have sorted through yet.
“Trying to understand the specifics and what that means to individual businesses is difficult,” said Cynthia Stephens, director of marketing for ByAllAccounts.
The fog surrounding Dodd-Frank isn't limited to advisers.
“Neither the public nor my clients really know anything about it,” said Mark DiGiovanni, president of Marathon Financial Strategies.
Lynn Ballou, managing partner of Ballou Plum Wealth Advisors LLC, hasn't had a chance to wrestle the bill to the ground — and when she does, she probably will concentrate only on the dimensions that could have an impact on her advisory practice, rather than those affecting banking, insurance, derivatives and other areas.
“I'm just now starting to get my arms around it,” Ms. Ballou said. “I don't think there are too many people who understand it all.”
As partisan rancor in Washington increases, so does skepticism about whether Congress can address such a formidable challenge as stabilizing the U.S. financial system.
“I don't have a lot of confidence that it will make a lot of difference in the long run ... because of the way it was created,” said Dan Candura, president and chief executive of Pennytree Advisers LLC.
“There's no huge change in the way in which financial markets operate. I don't think this eliminates the possibility of a crisis in the future. Yet that's what it's touted as,” Mr. Candura said.
Advisers' skepticism about Dodd-Frank stems in part from their recent experience with new layers of regulation. Specifically, the Securities and Exchange Commission promulgated a custody rule late last year that requires an annual surprise examination of client assets by an independent certified public accounting firm.
"EXPENSIVE STUFF'
The ByAllAccounts survey shows that the majority of advisers thought that the audit would cost less than $14,000. In reality, the tab was closer to $20,000, according to 38% of the respondents.
“It's very expensive stuff,” said James Carney, president of ByAll-Accounts. “It takes a lot more effort and manpower to meet all these requirements.”
The poll indicates that the top priority for 63% of the polled advisers over the next year is building their businesses. Many fear that Dodd-Frank will get in the way of that goal.
“That takes time away from their core focus, which is serving clients,” Ms. Stephens said.
E-mail Mark Schoeff Jr. at mschoeff@investmentnews.com.
