Every municipal bond issuer and borrower deserves to have an advocate on its side of the table. Only a
municipal advisor has the ability to provide all facets of advice on municipal bonds and municipal financial products and only a municipal advisor has the responsibility of providing such advice pursuant to a Federal fiduciary duty or duty of care.
Financial Advisers should be prohibited from resigning as financial adviser to an issuer, and then underwriting that issuer's bonds... This is a classic example of conflict of interest.
— Mary Shapiro
Former SEC Chair
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 more than $75 billion in municipal par offered and a 25-year track record of service to our clients, Columbia Capital brings independence and deep expertise to your public finance needs.
Issuers and borrowers large and small, from coast to coast, have relied upon Columbia Capital as a strategic advisor for 25 years.
Columbia Capital combines 150 years of public finance expertise among its team of highly experienced, proven professionals.
Columbia Capital is unaffiliated with commercial and investment banks, insurance companies and others in the financial services industry.
Columbia Capital Management, LLC is a registered with the US Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB) as a municipal advisor. The firm is also registered with the SEC as a registered investment adviser. Columbia Capital has a statutory duty to serve its governmental clients as a fiduciary.