IAA and Member Firms Urge Senate Co-Sponsorship of the Small Entity Update Act
October 15, 2025
Michael Lucia
Senate Banking Committee
Washington, D.C. 20515
Dear Michael,
I hope this letter finds you well.
Thank you for your steadfast commitment to promoting capital formation, strengthening U.S. financial markets, advancing investor education, and fostering innovation in the financial sector through sensible legislative updates and reforms.
We also appreciate your interest in H.R. 3382, the Small Entity Update Act – a bipartisan measure that passed the House unanimously – as well as its companion bill, S.2924, which was recently introduced in the Senate by Senators Katie Britt and Andy Kim. This legislation is critically important to the undersigned firms and to many others across the investment adviser industry.
The undersigned investment advisers – small businesses that provide fiduciary advice to help families plan for their future, support local communities, and create jobs – urge you to advance this important legislation. As members of the Investment Adviser Association (IAA), we respectfully ask you to co-sponsor this bill and help move it forward in the Senate. Your support would provide meaningful relief to small investment advisers and promote a more balanced regulatory framework that reflects today’s marketplace.
It is important to emphasize that this bill would not restrict the SEC’s rulemaking authority or mandate specific rules. Instead, it would require the SEC to update the way it evaluates the impact of its regulations on small investment advisers and to consider less burdensome alternatives where appropriate. This evaluation is already required under the Regulatory Flexibility Act.
The Regulatory Flexibility Act is particularly relevant here because the SEC’s outdated definition of “small entity” excludes many small investment advisers from these critical assessments. As a result, the Commission often overlooks the unique challenges faced by these firms when drafting rules.
The current definition fails to capture a meaningful portion of the small businesses under the SEC’s jurisdiction, leaving many small investment advisers – like the undersigned firms – effectively excluded from the protections the Regulatory Flexibility Act was designed to provide.
Given the significant and far-reaching impact of SEC rulemakings, it is essential that the agency conduct more thorough and accurate assessments of the costs, burdens, and economic effects its rules impose on small investment advisers. These firms are the backbone of the investment adviser community, and their voices should be properly considered in the regulatory process.
Your support for this important legislation would help ensure that small businesses are not unfairly burdened by overreaching regulations.
Thank you for your consideration. We would welcome the opportunity to discuss this issue further at your convenience.
Respectfully Submitted,
William A. Nelson
Director of Public Policy and Associate General Counsel
Investment Adviser Association
Member Signatories
Alpha Wealth Strategies
Bailard, Inc.
Bourgeon Capital Management
Bush Wealth Management
Chase Investment Counsel Corp.
Chesley, Taft and Associates, LLC
Clifford Swan Investment Counselors
Howland Capital Management
Hutchinson Capital Management
Mairs & Power, Inc.
Means Wealth Management
Osterweis Capital Management
R.M. Davis
Toews Asset Management
Vident Asset Management
WBH Advisory, Inc.
Wilkins Investment Counsel, Inc.
Williams Jones Wealth Management
Zevin Asset Management