Investment advisors, regulators and consumer advocates were astonished by the easy adoption of a key addition to the US Investor Protection Act that would give Finra power to oversee any advisor associated with a registered broker-dealer, including about 500 dually registered Finra members, according to Investment News.

That amendment, which the House Financial Services Committee approved last week,, would give the Securities and Exchange Commission the authority to allow the Financial Industry Regulatory Authority to expand its oversight of brokers' registered investment advisors, the publication said.

In the US and elsewhere, policymakers are looking to overhaul financial sector regulation in the wake of the credit crunch, to avoid potential product misselling and improve standards of financial advice.

“Finra is not the appropriate regulator for overseeing advice,” Richard Salmen, president of the Financial Planning Association, was quoted saying. “Finra is about sales products, about sales practices, [and] dealing with salespeople. That's a totally different culture than a fiduciary-based advisory practice,” he said.

“We were shocked that the amendment was considered,” Texas Securities Commissioner Denise Voigt Crawford, who is president of the North American Securities Administrators Association, said.