WASHINGTON, D.C. — Representatives Zach Nunn (IA-03) and Gregory Meeks (NY-05) today introduced the Clarity for Compensation Act, bipartisan legislation to support independent financial advisors by removing outdated regulatory barriers that penalize them for operating as small businesses.
“Small-town financial advisors shouldn’t be treated differently just because the rules haven’t kept up,” said Rep. Nunn. “These are folks helping families save for college, buy their first home, or plan for retirement. Our bipartisan bill gives them the same flexibility other professionals already have and helps keep trusted, independent advisors serving local communities.”
Under current law, registered financial advisors are often prohibited from using their own business entities to receive compensation. This is an arbitrary restriction that other licensed professionals—lawyers, accountants, and insurance agents—aren’t beholden to. The result is more red tape, higher taxes, and fewer choices for families who rely on local advisors. For many small firms, these restrictions make it harder to stay independent, especially in small and rural communities. The Clarity for Compensation Act fixes this issue.
“I’m pleased to co-lead the bipartisan Clarity for Compensation Act with Rep. Zach Nunn,” said Rep. Meeks. “This bill makes compensation rules in the financial services industry clearer and easier to understand. It improves oversight, supports the next generation of professionals, and helps more people access reliable financial advice.”
“As the industry evolves, the rules must also modernize to meet the needs of advisors, firms and, most importantly, American investors. Independent financial advisors need clarity and certainty that receiving commissions through their business entities will not expose them to claims by a future SEC that they are required to register as broker-dealers,” said Financial Services Institute President & CEO Dale Brown. “This bill ensures that these businesses can operate more efficiently, recruit the next generation of advisors, and offer their clients a wider range of products and services to better meet their financial needs. We thank Representatives Nunn and Meeks for introducing legislation that solves an administrative headache for independent financial advisors, allowing them to focus on helping their Main Street clients achieve a secure financial future.”
“Finseca applauds Reps. Zach Nunn and Gregory Meeks for introducing this bipartisan legislation,” said Finseca CEO Marc Cadin. “With a looming shortage of 100,000 advisors, this legislation creates regulatory certainty that could open the door for new talent, build future leaders, and strengthen the workforce—ensuring financial security professionals can keep helping Americans achieve financial security.”
This commonsense fix will help Iowa’s independent financial advisors grow their businesses, keep services local, and compete on a level playing field.
Text of the bill can be found here.
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