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A pending Finra proposal to ease the requirement that brokerages supervise their representatives’ work with unaffiliated registered investment advisers sounds like regulatory relief. But some brokerages are worried about the price for losing oversight of outside business activities.

Monitoring an unrelated third-party adviser can be a hassle, but it also means broker-dealers can take a cut of their affiliates’ RIA revenue, usually about 5%.

The Financial Industry Regulatory Authority Inc. board advanced the proposal at its December meeting, but the agency has not yet released a rule proposal. Depending how it’s written, obviating the need to supervise RIA work also eliminates the need to charge for that service.

“It’s going to be hard to justify that haircut,” said Jon Henschen, president of Henschen & Associates, an independent broker-dealer recruiting firm. “It will be the loss of a profit center for some broker-dealers.”

As more hybrid advisers shift from commission-based revenue to fee-based revenue, IBDs are eager to capture some of that flow when advisory assets are held at an unrelated firm. One way to do it is to charge for supervision.

Joseph Russo, CEO of Advantage Financial Group, a hybrid firm, has a more positive view of the potential rule. He stresses that it could clarify the pricing mechanisms built into the relationship between IBDs and outside RIAs.

“I understand the concern that this eats into an important revenue stream,” Mr. Russo said. But “it’s difficult for me to think that transparency in our industry is a bad thing. There would no longer be confusion about the role the IBD is playing in the RIA world.”

But Dean Harman, owner of Harman Wealth Management, said that depending on how the Finra rule is constructed, it could actually make the IBD-RIA relationship more complicated.

“It’s going to lead to some confusion,” Mr. Harman said. If their registered reps work at outside RIAs, “probably some B-Ds would say they get dragged into liability anyway and [under the Finra rule] they’re not making any revenue.”

It’s not clear when Finra will release a rule for public comment. The proposal would be designed to narrow the list of outside business activities that a brokerage has to monitor, focusing them on investment-related activities that are more likely to harm investors.