Washington INsider

Washington INsiderblog

Mark Schoeff Jr. looks at what's really happening on Capitol Hill - and the upshot for advisers.

Mr. Adviser goes to Washington

Advisers' already slow progress in Congress just got slower as partisan tensions rise

Jun 13, 2014 @ 12:24 pm

By Mark Schoeff Jr.

partisan congress, advisers, republicans, democrats
+ Zoom

More than two dozen members of the Investment Adviser Association chose an auspicious time to roam Capitol Hill on Thursday to meet with lawmakers and their staffs during the organization's Lobbying Day.

The House was buzzing with intrigue about the downfall of Majority Leader Eric Cantor, R-Va., in a primary election earlier in the week — the first time anyone in a position that high had lost in a primary.

Mr. Cantor's demise will increase partisan tension in Washington and further ensure that not much gets done in in the capital. For investment advisers, whose issues are usually ignored by lawmakers who don't understand their industry, it makes pushing their agenda even more difficult.

But Bernie Clark, executive vice president of advisor services at Charles Schwab & Co. Inc., hasn't lost faith. He enthusiastically participated in IAA's Lobbying Day, educating legislators and their aides about the characteristics of the investment advisory business, such as advisers being required to act in the best interest of their clients and operating for the most part as small businesses.

“I'd like to see Congress begin to appreciate that in ways that will help finance committees and others work on future legislation,” Mr. Clark said between meetings.

Advisers are making inroads slowly. Mr. Clark pointed to the example of adviser opposition helping kill a 2012 bill written by then-House Financial Services Committee Chairman Spencer Bachus, R-Ala., that would have established one or more self-regulatory organizations to oversee advisers. Advisers were worried that the bill would have ushered in the Financial Industry Regulatory Authority Inc., the broker-dealer SRO, as the adviser regulator.

Mr. Bachus never re-introduced his legislation. Instead, what's on the table now is a bill that would allow the Securities and Exchange Commission to charge advisers user fees for exams and an idea from SEC Commissioner Daniel Gallagher for the agency to establish third-party examinations for advisers.

“I think that's progress,” Mr. Clark said. “We're [moving] toward solutions. We're going to keep coming back and telling [our] story.”

One way that advisers cut through the cacophony on Capitol Hill is by making a unique proposition to lawmakers. They want their exam frequency to increase, according to Skip Schweiss, managing director of adviser advocacy at TD Ameritrade Institutional.

“It's very unusual for us to come in and ask for more regulation for the sake of investors — and we're willing to pay for it,” said Mr. Schweiss, who also participated in the IAA Lobbying Day. “That really gets their attention. They don't have that throughout the day from other meetings they're in.”

Sometimes, though, visits from financial advisers can have a practical effect on policy, according to Dean Harman, owner of Harman Wealth Management Inc.

He participated in the Financial Services Institute's advocacy day in May. More than 100 FSI members expressed their reservations to lawmakers about the pending Labor Department fiduciary-duty rule. Mr. Harman said FSI should take partial credit for a rule delay that was announced a week later.

“Some of that was the result of meetings we had with members of Congress, and the things they learned,” Mr. Harman said.

Advisers should come to Washington more often, Mr. Harman said. Sitting down with a lawmaker can connect them directly to national policy.

“That's the most important aspect of this – is making it real,” Mr. Harman said.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Oct 17

Conference

Best Practices Workshop

For the fifth year, InvestmentNews will host the Best Practices Workshop & Awards, bringing together the industry’s top-performing and most influential firms in one room for a full-day. This exclusive workshop and awards program for the... Learn more

Latest news & opinion

DOL fiduciary rule opponents want to push implementation back until 2019

ICI, Chamber of Commerce among groups asking for delay, while Democratic lawmakers call on DOL to keep to its earlier planned schedule of Jan. 1, 2018.

Take 5: Vanguard's new CIO Greg Davis talks bonds, stocks and costs

Having just stepped into the role, this veteran of the firm now oversees $3.8 trillion in assets in more than 300 mutual funds and exchange-traded funds.

Tech companies deploy behavioral finance tools for advisers

They seek to turn knowing more about clients into growing more revenue.

Retirement planning for women

Longer lifespans and lower savings require creative income strategies.

Sean Spicer resigns as press secretary after Anthony Scaramucci is appointed communications director

Scaramucci is known as an ardent foe of the DOL fiduciary rule, having said during the campaign that Trump would repeal it .

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print