While your financial planner may act in your best interest, who acts in the best interest of your financial planner? The Securities Industry and Financial Markets Association (SIFMA) is a nonprofit trade association for investment bankers, broker dealers and asset managers. If you’re an investment professional or a client, there are a few things should know about SIFMA and how they impacts the financial services industry.
What Is SIFMA?
The group works on legislation, business policy and regulations that affect investors and related services. Their stated goal is to promote fair markets and regulatory compliance.
Before SIFMA existed as it does today, it went through a few other iterations. Its was founded as the Investment Bankers Association of America, or IBA, founded in 1912. It then merged with the Association of American Stock Exchange Firms (ASEF) in 1971 to form the Securities Industry Association (SIA).
In 1976, the Public Securities Association (PSA) was born out of IBA’s original municipal securities and government bonds committees. The PSA incorporated as an independent organization and, in 1997, changed its name to The Bond Market Association (TBMA).
In 2007, SIA and TBMA merged into one streamlined group and acronym: SIFMA.
What Does SIFMA do?
SIFMA serves as a voice for those who work in the securities industry. It shares market insights, education resources and policy.
It also publishes white papers, studies and testimony. The group conducts independent research on data and insights in the industry. SIFMA often releases fact sheets and guidelines for those seeking best practices and standards for their work.
SIFMA is a trade association that includes companies and individuals among its members. Membership rank in SIFMA depends on how a member joins. For instance, individual industry professionals can attend educational seminars, network with others in the industry, and work on professional development.
Broker-dealers and asset members can join and receive full membership privileges. They get access to members-only conference calls, committees, councils, and legal opinions and surveys that individual members don’t.
SIFMA represents more than 500 firms in the U.S. and around the world. The group accounts for more than 75% of U.S. broker-dealers by revenue and 50% of all assets under management. Its member firms are responsible for more than $185 trillion in assets and manage more than $67 trillion in assets for their clients. Those clients include banks, mutual funds, brokerage firms, and retirement plans.
What SIFMA Cares About
SIFMA’s work on behalf of its members addresses a number of issues. The more than 13,000 professionals among SIFMA’s membership participate in more than 100 committees and sub-groups. Industry policy and guidelines are included among the groups’ efforts, but represent just a fraction of their work. Areas of recent interest include:
- The economy: The group covers topics including the unemployment rate, inflation, and consumer trends.
- Interest rates: Fluctuation in interest rates is important to this organization. The group attempts to interpret those movements and anticipate interest-rate turbulence.
- Elections: Since legislation can change depending on who is in office, SIFMA keeps track of political affairs and individual races.
SIFMA research, meanwhile, includes:
- White papers: When new policy is enacted, the group creates documents to help educate members on the topic. They recently created a white paper on the Security and Exchange Commission’s (SEC) Consolidated Audit Trail (CAT).
- Studies: From a deep dive into data fees to policy analysis, SIFMA has a report for it.
- Amicus briefs. The group has an Amicus & Litigation Advisory Committee that regularly submits amicus briefs for relevant court cases.
The SIFMA Foundation
Aside from working as a resource for investment professionals, SIFMA also attempts to educate people who aren’t necessarily in the industry.
The SIFMA Foundation provides educational tools and resources related to financial literacy among industry workers and younger students. Their work includes:
- The Stock Market Game: An online game for fourth to 12th graders that educates them on personal finance, investing, and economics.
- InvestWrite: A national essay competition which, along with The Stock Market Game, works to educate students about global markets.
- Capitol Hill Challenge: A financial education competition for middle and high schoolers in each congressional district. The students are given a theoretical $100,000 to manage as an online portfolio where they get to invest in real stocks, bonds and other securities.
- Invest It Forward: This pairs Stock Market Game educators with financial professionals to provide industry insight for students.
A study by the foundation found that students who participated in The Stock Market Game scored higher in mathematics tests compared to those who didn’t play the game. The study showed that students in grades 4 to 6 who played the game scored in the 55th percentile, while those who didn’t play scored in the 43rd percentile.
Students, educators, and financial professionals all can get involved in the foundation. They can teach a financial literacy class, judge a student essay in the InvestWrite competition, or donate to the Foundation, which is a 501(c)(3) nonprofit.
Are You Ready to Join SIFMA?
Before joining, see which membership tier you fall into:
- Full Membership — For broker-deals and asset managers.
- Associate Membership — For other market participants, like law firms, settlement providers, rating agencies, technology firms and more.
- Individual Membership — For individual industry professionals.
Costs for membership vary by company. Depending on the level of membership, those costs could be based on how many employees in the company are joining the group.
SIFMA is an industry organization for financial professionals, but its mission applies to lots of people outside the industry. Its goal is to build public trust in markets while educating both the industry and public at large.
SIFMA keeps on top of issues including infrastructure, online security, and tax reform. If you’re working within the industry, you may want to give the group’s materials a look and see if it’s a good fit.
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