With the advent of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, a single firm can no longer provide both financial advice and underwriting services on the same transaction: the same firm providing both advice and execution provides an unresolvable conflict. Debt issuance may be the single most costly undertaking by a government or non-profit borrower during a year. Don't you deserve to have someone on your side?

As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Congress created a new class of regulated entities called, municipal advisors, and made it illegal for any firm or person not registered as a municipal advisor (MA) to provide advice to municipal entities with respect to municipal bond issuance and municipal financial products.

Congress drew the statute broadly to include firms that historically have provided this type of advice but also, potentially, to include others who might provide such advice as part of other services on behalf of municipal entities. Congress delegated the authority for regulating MAs to the US Securities and Exchange Commission (SEC).

In its final rule on the registration of municipal advisors, the SEC indicates that Congress‘s purpose in regulating MAs was in part to reduce the potential for and impact of municipal market participants participating in pay-to-play practices, undisclosed conflicts of interest, advice provided by individuals without adequate qualifications and failures to exercise duties of care and loyalty to municipal entities. Together with Rule G-23 of the Municipal Securities Rulemaking Board (MSRB), the MA regulations also prohibit the all-to-common practice of role switching, where a single firm would provide advice on a transaction, resign and then underwrite the bonds for that same transaction.

The value of quality financial advice has been quantified in academic study. In 2006 two researchers at the business school at the University of Nebraska found that quality financial advice provided a pricing advantage of nearly 0.05% in true interest cost (TIC) on the pricing of new issues. In addition the same authors found that on-going relationships with financial advisors are also associated with lower borrowing costs.

Independence matters. Experience matters. As a registered municipal advisor with advice provided on nearly $83 billion in municipal par offered and a 26-year track record of service to our clients, Columbia Capital brings independence and deep expertise to your public finance needs.