THE small investor, whose views are often lost in the din of brokers, lawyers, executives and others, is getting a new voice.
According to a statement to be released tomorrow, securities officials from several states have set up a new group, the National Council of Individual Investors. Organizations for investing's rank and file are few, and this one, its creators say, is unique for its focus on advocacy and investor self-protection.
Investors who are interested should have the opportunity to have an organization who can speak for them," said Richard Latham, a retired securities regulator from Texas and the chairman of the member-supported group.
The council's finances come from the roughly $1 million awarded to state regulators as part of a settlement of securities cases brought against Drexel Burnham Lambert.
But while it has taken six years to get the council off the ground because of Drexel's prolonged bankruptcy, it has arrived just in time to join the recent legislative debates over moves to rein in regulators and make it harder for investors to sue for securities fraud. The need for the council "is apparent with everything going on: the basic attack on individual investors by Congress and the industry," said its policy director, Gerri Detweiler, the former director of Bankcard Holders of America, a consumer organization.
The council, based in Washington, will lobby legislators and put pressure on the financial services industry. It plans to support changes like paying brokers not by commission but by the performance of the investments they recommend.
"I'm going to be very aggressive fighting for individual investors," Ms. Detweiler said. The council promises to be independent of the regulators who founded it, although former regulators will play a role in its operation.
There are now two large investor groups, but neither does quite what the council plans to do.
The American Association of Individual Investors, with 170,000 members, focuses on helping investors make better decisions. "As it's intended at least now, they're going to do one thing we won't do: lobby," said James Cloonan, the association's chairman, who will serve on the council's board of advisers.
The other group is the National Association of Investors Corporation, which represents some of the nation's investment clubs and has 350,000 members. While that organization considers itself mostly educational, it does take stands on securities issues, but far tamer than what the council intends. The national association favors the current securities reform efforts, for example.
"We are really not advocates who go out and rattle cages and tell people to sue a corporation or try to change management," said Kenneth Janke, national association chairman and a member of the council's advisory board.
The council says it will stake out new educational ground, too. While members of the other two associations often are experienced investors interested in going beyond the basics, the new council's constituency will be novices who need to learn say, how to find an honest brokers.
The council's success depends on attracting enough members to support it beyond its $1 million in seed money. It has proposed an annual budget of $3 million, which will require a membership of 40,000 within 12 months. Members will pay $49 a year in dues, and receive a newsletter, access to a help line and other services. To join, call (202) 467-6244. A site on the Worldwide Web -- http://www.ncii.org/ncii -- is to be open on Nov. 16.
"I'm enthusiastic about this," Mr. Latham said. "But it's going to work only if the individual investor thinks it's something worth joining."
