Financial Services Institute Backs New Jersey Bill Protecting Independent Advisor Model
From the desk of Jim Eccleston at ÍøÆسԹÏ
The Financial Services Institute (FSI) has urged New Jersey lawmakers to advance legislation that would help preserve the independent contractor status of financial advisors operating in the state. According to AdvisorHub, FSI recently submitted testimony supporting Senate Bill S2782 before the New Jersey Senate Budget and Appropriations Committee.
The proposed legislation would clarify that certain licensed and regulated professionals, including financial advisors, may continue operating as independent contractors rather than employees. As reported by AdvisorHub, FSI argues that the bill would provide needed certainty following the New Jersey Department of Labor and Workforce Development's adoption of a final independent contractor rule earlier this year.
FSI contends that the independent wealth management channel remains vulnerable under the new regulatory framework. According to testimony cited by AdvisorHub, the organization believes the final rule does not adequately recognize the supervisory obligations that broker-dealers and financial advisors already satisfy under federal and state securities laws.
The trade association emphasized that many advisors intentionally choose the independent contractor model. FSI stated that advisors often leave employee positions to operate their own businesses, develop client relationships independently, manage their own tax obligations, and hire their own staff.
Without a clear statutory exception, FSI warns that state regulators could determine that independent financial advisors do not qualify for contractor status under the new rule. According to AdvisorHub, the organization believes such an outcome could create uncertainty for advisors and the firms that support them.
FSI told lawmakers that Senate Bill S2782 would provide greater clarity for both advisors and firms while helping ensure that New Jersey investors continue to have access to professional financial guidance. As AdvisorHub reports, the organization maintains that preserving the independent advisor model remains important to both the industry and the investing public.
The trade group also cited findings from a 2025 survey conducted with Oxford Economics. According to data referenced by AdvisorHub, only 11 percent of New Jersey independent advisors indicated they would accept employment with a financial firm if they no longer could operate as independent contractors.
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Tags: eccleston, eccleston law, independent financial advisors, independent contractor status, securities regulation, new jersey legislation, financial services institute
