FSI, Finseca, Quad-A Applaud Advancement of Bipartisan Clarity for Compensation Act

House Financial Services Committee unanimously passes bill modernizing payment rules for financial advisors, supporting business growth and efficiency

The Financial Services Institute (FSI), Finseca and the Association of African American Financial Advisors (Quad-A) commend the House Financial Services Committee for unanimously passing the Clarity for Compensation Act yesterday afternoon. The bipartisan legislation would modernize outdated payment rules for independent financial advisors, helping improve operational efficiency and support business growth.

Independent financial advisors' businesses have evolved from solo practices to more complex business entities with multiple advisors and staff serving clients. The Clarity for Compensation Act would permanently update the rules to allow compensation to be paid directly to financial advisors' personal service entities, reflecting how modern advisory businesses operate. This flexibility supports reinvestment in advisors' businesses and enhances client service and staff development. Additionally, it will help firms and advisors recruit, train and compensate junior advisors.

"We thank the House Financial Services Committee for advancing this important legislation that aligns commission payment rules with modern business practices," said FSI President & CEO Dale Brown. "Independent financial advisors are business-owners serving clients in their communities across the country. The Clarity for Compensation Act eliminates operational inefficiencies, supports succession planning and helps attract the next generation of financial advisors-ultimately strengthening Americans' access to professional, objective financial advice."

"The Clarity for Compensation Act builds on the SEC's recent no-action letter to give our profession the long-term certainty it needs to grow and serve more families," said Marc Cadin, CEO of Finseca. "Modernizing how advisors are paid is not just a technical fix-it's a commonsense update that reflects how today's advisory teams actually operate and will help attract, train, and retain the next generation of diverse financial security professionals."

"The Clarity for Compensation Act recognizes the realities of today's financial advisory profession and provides the flexibility advisors need to build sustainable, growing businesses," said Sheena Gray, Chief Executive Officer of Quad-A. "Modernizing these payment rules removes unnecessary barriers that can hinder business growth, succession planning, and the development of the next generation of advisors. This bipartisan legislation helps create an environment where advisory firms-including diverse and emerging firms-can invest in talent, expand access to financial advice, and better serve clients and communities across the country."

The organizations urge the House of Representatives to vote on and pass this needed, common-sense legislation in a timely manner.

About the Financial Services Institute (FSI): The Financial Services Institute (FSI) is the only organization advocating solely on behalf of independent financial advisors and independent financial services firms. Since 2004, through advocacy, education and public awareness, FSI has successfully promoted a more responsible regulatory environment for nearly 60 independent financial services firm members and their 130,000-plus affiliated financial advisors-which comprise over 45% of all producing registered representatives. We effect change through involvement in FINRA governance as well as constructive engagement in the regulatory and legislative processes, working to create a healthier regulatory environment for our members so they can provide affordable, objective advice to hard-working Main Street Americans. For more information, please visit financialservices.org.

ABOUT FINSECA: At Finseca, we know that financial security improves people's lives and protects their livelihoods and future well-being. We are rising to the challenge of increasing financial security for all. Finseca represents the men and women of the financial security profession who dedicate themselves to delivering financial security to their clients every day.

About the Association of African American Financial Advisors (Quad-A):
The Association of African American Financial Advisors (Quad-A) is the leading professional organization dedicated to increasing the representation, development, and success of African American financial advisors. Through advocacy, education, strategic partnerships, and leadership development, Quad-A works to create a more inclusive and equitable financial services industry while expanding access to quality financial advice in underserved communities. Quad-A empowers financial professionals to build thriving practices, cultivate the next generation of advisors, and drive lasting economic opportunity for the clients and communities they serve. For more information, visit aaafainc.org.