Raymond James Executive Chairman Thomas James said he is optimistic that the financial services industry can work more closely with regulators, even as evolving regulations such as a uniform fiduciary standard and the Volcker Rule have started off with the wrong approach.

Speaking at the Securities Industry and Financial Markets Association annual conference in New York on Tuesday, James said he does think it is possible for the financial services industry to work more regularly with regulators, while acknowledging it is not easy.

“Today, I think most of the people in here would be a little paranoid that if they took a problem to a regulator, they might get a visit next week from the [regulatory] team,” James said. “You really need to have a mechanism so that you can meet reform that enables you to meet and talk about future problems.”

One particular area that a closer alignment could help with is the consideration of a new fiduciary standard that would apply to all financial professionals who provide investors with advice. Raymond James, which is based in St. Petersburg, Fla., has always operated based on a fiduciary standard, James said, and the legal community has always helped hold the industry to certain rules.

But the new regulatory focus on creating one formal rule has started “from the wrong point,” James said, by focusing on a fiduciary is defined by asset managers who do not deal directly with investor clients.

“We need to make sure on the other side of this that both sides receive equal treatment and equal regulation,” James said. “If they don’t, we’ll continue to have an environment where somebody who does the same thing as a financial advisor working at some major firm goes 10 years without having anybody visit them to check to see whether they are adhering to good principles or not.”

Another developing regulatory area that also needs to take a new approach is the Volcker Rule, according to James. The proposed rule currently caps firms’ investments in areas like hedge funds and private equity at 3% of their tier 1 capital, which James said is a “silly” approach.

“You should just have a 100% haircut on all of your delinquent investments, and if you still have very good ratios, you should be able to do that,” James said. “The approach is wrong.”

Raymond James now probably has about 6% of its capital committed to investing in other venture capital funds, the firm’s own venture capital funds and its merchant bank, James estimated. The firm typically allocates a maximum of 10% towards those investments. That investment strategy has provided high rates of returns and benefited shareholders, James said, while the firm is prepared to scale back.

“We can grow our core businesses, which are our bank, our capital markets efforts and our retail and asset management businesses and cut back to 3%” in those other investment areas, James said. “The rule needs to have some sense relative to the size of the company and the excess capital that that company has.”

One area of regret that James acknowledged: Raymond James’ involvement in Facebook’s botched initial public offering this past spring.

“We were not a major underwriter, but we were an underwriter,” James said. “We should have gone back and turned the dam when they raised the range. It was unfortunate.”