The State of Our Industry

So far this year, firms in the U.S. have raised $1.3 trillion in public debt and equity. M&A activity was the strongest first three quarters on record. Even excluding the record-breaking Alibaba IPO, IPO dollar volume increased 13% over the same period in 2013 and included robust activity for small and mid-size businesses. The wealth management industry should also have a record year, following strong performance in our equity markets. We’ve seen a trend of investor clients moving to fee-based models that focus on wealth management and financial planning, and away from a more transactional model.

On the other hand, the fixed-income business has been challenged by a low interest rate environment. Regulatory changes in the municipal markets have been particularly impactful for regional firms.

From left: Cheryl Crispen, William A. Johnstone, Kenneth E. Bentsen, Jr., Randy Snook, Andy Blocker, Ira Hammerman

Where does SIFMA fit in all this?

You know our name, but you may not be as familiar with our role.

SIFMA is the leading trade association for broker-dealers, banks and asset managers. We’re an extension of our members, from the biggest firms on Wall Street to small offices rural communities. We advocate in support of America’s capital markets, ensuring they are safe and sound while remaining the deepest and most liquid in the world.

In 2014, SIFMA filed over 130 comment letters and 16 amicus briefs, engaged directly in litigation on key matters, conducted 60 conferences as well as countless roundtables and workshops, and published more than 30 research reports and compilations of industry statistics.

A Sizeable Footprint

  • SIFMA’s members represent 80%, or $13 trillion, of broker-dealer client assets
  • SIFMA’s Asset Management Group (AMG) members represent approximately 50%, or $30 trillion, of registered investment advisor assets under management
  • SIFMA’s Private Client Group represents 75%, or 270,000, of U.S. financial advisors


Did You Know? One of your colleagues is working with us
More than 10,000 professionals from over 500 member firms work with 140 SIFMA staff on more than 100 product, policy, functional and enterprise committees.

What will make our capital markets stronger?

As Mary Jo White, Chair of the U.S. Securities and Exchange Commission (SEC), said at our Annual Meeting, “The markets are the strongest and most reliable in the world – but that doesn’t mean they can’t be optimized.”


As the headlines will tell you, we are seeing an increasing level of risk and cyber attacks against the financial services industry. SIFMA has undertaken a major cybersecurity initiative over the past year, looking at the industry in terms of an industry weakness diagnostic. We’ve provided actionable industry cybersecurity standards for firms of all sizes and established a new decision-making committee of industry participants for both the equity and fixed income markets. We are educating the industry about evolving threats; increasing participation in FS-ISAC, the industry’s forum for cyber threat information sharing; and continuing to convene industry-wide business continuity planning tests and exercises.

Equity Market Structure

Earlier this summer, SIFMA provided recommendations to reform equity market structure. Our recommendations propose to: reverse the increasing complexity of U.S. equity markets and order types; improve access to and resiliency of the equity market data system; and enhance transparency to all investors about how orders are routed and executed. U.S. equity markets today are much more efficient than they have been in any time, but our industry needs to work with the SEC to address questions around technology and transparency that affect investor trust and confidence in the markets.


What about the individual investor?

Consumers benefit from increased choice of financial products, and we want to preserve an investor’s right to choose the product and service model that best meets their needs. SIFMA has long advocated for the SEC to establish a uniform standard of conduct for brokers and advisors when providing personalized investment advice. The new standard envisioned by SIFMA would put retail investors’ interests first and provide adequate flexibility to preserve and enhance investor choice of and access to financial products and services. Unfortunately, the U.S. Department of Labor (DOL) continues to put on its agenda a proposal to amend the Employee Retirement Income Security Act (ERISA) that would adversely affect millions of Individual Retirement Arrangements (IRA) holders and retirement plan participants by unduly restricting investors’ choice and raising their costs. The proposal was held back from issuance this summer, but we expect it to resurface in the first quarter of 2015.

What’s on SIFMA’s 2015 policy agenda?

We have a lot on our mind:

Throughout every issue we work on, it’s vital that any cross-border regulatory developments are conducted in a coordinated and consistent manner. We’re busy implementing operational reforms, including a Consolidated Audit Trail (CAT). Our comprehensive white paper details recommendations for building the CAT, which we believe FINRA should use instead of their proposed Comprehensive Automated Risk Data System (CARDS). We continue to engage with regulators to advocate for an improved, more transparent and collaborative process for determining systemic designations.

One particularly interesting effort underway is our opportunity to help protect seniors from financial fraud. We are working with elder groups and state regulators to put together principles so our financial advisors, who are on the front line with their clients, can be empowered to take action when they suspect irregular activity that could indicate fraud.

Are you in favor of changing Dodd-Frank?

As our President would say, let me be clear. The industry has been and remains in favor of reform. We’ve made our markets safer and stronger. Dodd-Frank made some meaningful progress, like resolution authority and living wills, and we are implementing it. However, it’s rare that you have a bill of that size that does not require technical corrections to implement it properly – on issues like the swaps “pushout” rule or Volcker CLO. The reticence to make necessary refinements is unprecedented, but we do think that bipartisan, bicameral support for reasonable clarifications may exist in the 114th Congress.

View more highlights from SIFMA’s 2015 State of the Industry press briefing at:

Kenneth E. Bentsen, Jr.
President and CEO