If Michael Pieciak gets his way, states nationwide will adopt uniform regulations governing fee rates for advisors charging solely for financial planning and not managing substantial assets — a potentially burgeoning channel for the wealth management industry.

Pieciak is the Commissioner of the Vermont Department of Financial Regulation. In September he started a year-long term as president of the North American Securities Administrator Association, a member organization for state securities regulators.

Pieciak has a skeptical view of how much value advisors can add if they offer only advice and don’t custody or manage client assets.

“There is only so much education and advice that can be given to a consumer that fits that profile. We are going to look hard at that,” Pieciak says.

Under Pieciak’s leadership, NASAA recently established a strategic planning commission assigned to look precisely at the issue of making state fee rules uniform, Pieciak says.

The issue is partly that Federal regulators could use a lack of uniformity among states as a rationale for making inroads into state regulators’ turf. Concerns about such a scenario unfolding motivates Pieciak and other state officials to seek uniform rules.

States typically regulate advisors whose AUM falls under a $100 million threshold set by the SEC.

“Our regulators want preservation of state authority,” Pieciak says – apparently a particularly relevant concern for him given that the Trump administration’s SEC and its Department of Labor announced this month that they plan to introduce new regulations governing financial advisors by September 2019.

If uniform rules are developed, Pieciak predicts they wouldn’t permit flat subscription rates for financial planning to go sky high.

“It is very important to the investor, making sure that fees are transparent and reasonable. That is our primary goal but uniformity [among the states] would also be a good thing,” Pieciak says.

Under his leadership, NASAA, which recently celebrated its 100th anniversary, has set plans to establish a nationwide legislative program, bringing representatives from state houses into the process of helping foster enthusiasm for uniformity in state regulations, according to Pieciak.

Even in states with legislatures led by Republicans who support the Trump administration, Pieciak argues enthusiasm might grow for states establishing more uniformity to preserve their authority.

Michael Kitces has multiple stakes in the outcome of such uniformity proposals. Kitces is an industry blogger, a partner in Columbia, Maryland’s Pinnacle Advisory Group, a cofounder of the fee-only planner organization XY Planning Network, and an entrepreneur who launched the AdvicePay platform through which advisors can charge clients for financial planning services even if they do not manage assets.

Michael Kitces

“One of the major challenges in facilitating fee-for-service financial planning is that most advisors who charge primarily or solely for financial planning (and don’t also manage substantial assets) will be well under the $100 million AUM threshold for SEC registration, and thus will be state-registered investment advisors, or state RIAs. And what we know first-hand from XYPN – where we have registered more than 300 state RIAs in just the past two years – is that there is a lot of irregularity from one state to another in the state regulation of financial planning fees and how to bill and collect them,” Kitces writes in an emailed reply to an enquiry for this story.

Yet all the talk about uniformity among state regulators has yet lead to action, according to Kitces.

“We’ve seen no significant changes, aside from a general growing recognition from state regulators of the emergence of standalone fee-for-service models,” he writes.