Financial Regulatory System Needs Overhaul

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The financial services industry needs a facelift; let's just hope the right surgeon gets the call.
 
Previously,  I wrote about how Finra (apparently the financial services enforcer of choice for the Obama Administration) is attempting to bring the SEC under its umbrella, creating a self regulatory organization (SRO) that will oversee all financial services. But with new regulatory authority in 2008, it looks like Finra wasn't up to the task:
 
"A new study has found that FINRA’s fines and enforcement actions against broker/dealers and registered representatives dropped sharply in 2008, the first full year that FINRA represented the combined regulatory arms of NASD and NYSE,” according to Investment Advisor.
 
Now, 2008 was not exactly a scandal-free year in the world of financial services, especially those overseen by Finra. Amazing!
 
So here's some food for thought: the peak year for recent enforcement action was 2005, with steady declines in subsequent years, according to the article. Coincidentally, 2005 was the year immediately after a presidential election. Was the 2008 election another factor in the decline of investigations?
 
So what does it mean that Finra may bring the SEC under its wing, as well as try to regulate Investment Advisors through some yet-to-be-created SRO?
 
And what does all this proposed centralized regulation mean when the inevitable tidal wave of litigation hits, as investors seek retribution for their 2008 losses? After all, the industry is still working through legal actions that resulted from the bursting of the Tech Bubble!
 
Perhaps there is a solution and a place for YPs to lend support. The Financial Planning Association, The National Association of Financial Advisors, and The Certified Financial Planner Board of Standards, Inc., have formed a Financial Planning Coalition. Their goal is to create a national standard for financial planning services. The Coalition wants to ensure these services are delivered to the public with fiduciary accountability and transparency, serving the client’s best interest first and always. 
 
It is their hope that a professional body can be created in some form to oversee regulation, credentialing, and advancement. They are proposing the CFP® Board of Standards be the basis for this. That, in and of itself, raises all kinds of issues -- especially with the plethora of competing interests out there (read here) -- but perhaps this will be the cornerstone of a future movement that will not only distinguish financial planning, but improve all financial services.