BANKING & FINANCE - Feb. 21, 1992

SEC Has Just 46 Inspectors for 17,000 Financial Planners: The $5-trillion financial planning industry is so under-regulated that most of the 17,000 firms offering investment advice will never be inspected for possible fraud, SEC Chairman Richard C. Breeden told the securities subcommittee of the Senate Banking Committee. Breeden said his inspection staff is spread thin and only advisers managing at least $1 billion in assets are targeted for an SEC inspection about every three years. That means smaller professional money managers or counselors are checked only about once every 30 years, “which in most cases means never at all,” said Breeden. Breeden said the recent indictment of Newport Beach investment adviser Steven D. Wymer, who managed $1.2 billion in funds for dozens of communities in California, Colorado and Iowa, underscores the need for a tough cop on the beat. Wymer’s clients may have suffered losses exceeding $100 million.