Bridging the gap between advisers and their elected representatives

Something about the title “representative” or “senator” seems to put the person holding it behind an imaginary wall, whether at the state or federal level. Even though we know our elected officials work for us, many of us assume that lawmakers are too busy meeting with heads of state and captains of industry to sit down for a quick discussion on what’s happening in our lives and businesses.
The fact is that elected officials are much more approachable — and more open to hearing the everyday concerns of their constituents — than many people realize.
That simple message has been at the core of the Financial Services Institute’s State Capitol Day events, launched this year in an effort to form connections between our members across the country and the state legislators and regulators whose decisions are so crucial to ensuring that Main Street American investors continue to have access to objective, professional financial advice.
Our California Capitol Day event, held in Sacramento on March 11, brought our members together to meet with legislators on key committees to explain the independent financial advice model, detail how our members serve clients throughout the state and emphasize their commitment to strengthening their respective communities through initiatives like financial literacy outreach.
As part of the more than two dozen meetings FSI facilitated with lawmakers in Sacramento, our members were also able to educate legislators on the potential negative consequences of a pending state bill that would impose a tax on professional services, including financial advice. Many of the lawmakers we spoke with had not fully realized the potentially damaging effects the bill could have on middle-class savers prior to these discussions.
DIALOG BENEFITS
The dialogue between advisers and lawmakers that has been established through these State Capitol Days offers tremendous benefits for legislators, as well. Elected representatives at every level — both federal and state — are constantly bombarded with bills and proposals on a vast array of specialized and often highly technical policy topics. Despite the hard work and careful thought they put into considering these proposals, few legislators have the time or specific expertise to understand the nuances and unintended consequences of every bill that comes before them.
By meeting face-to-face with state lawmakers, our members are able to position themselves as valuable expert resources for these officials, as they work to understand the potential ramifications of the various complex financial bills that come up for consideration during each legislative session.
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At our Florida State Capitol Day on March 31, our members participated again in more than two dozen meetings with lawmakers, during which they offered their assistance and professional insight to help the representatives develop a clearer picture of how such bills may directly impact their constituents’ retirement planning. At the same time, our members expressed their support for several financial literacy bills making their way through the Florida legislature, and emphasized how crucial these measures are in helping Main Street Americans take control of their own financial future.
Most recently, our members attended the first Texas State Capitol Day in Austin on April 20. They had the opportunity to participate in nearly 30 meetings with state legislators and their staff and discussed important issues such as financial literacy and the repeal of an existing $200 occupational tax on financial services professionals.
ESTABLISHING RAPPORT
Such positive and constructive experiences in establishing an initial rapport with state lawmakers and regulators go a long way toward empowering advisers and to helping them realize that they have much more influence in the legislative and regulatory process than they previously thought. As our member Steve Emerson of First Pacific Financial Services said after our California State Capitol Day, “This is a great way to participate in the law making process and influence an outcome to benefit my profession.” Our final State Capitol Day of 2015 is in New York in June.
(More: TD developing new tool to give RIAs a stronger voice in D.C.)
As we have seen repeatedly, state-level legislation has the potential to impact independent financial advisers and their clients — for both better and worse — much more quickly than similar bills at the federal level, where partisan gridlock means very few bills are signed into law. In the states, by contrast, controversial and far-reaching bills often do not receive the same level of media coverage, and can progress through the legislative process and into law before many voters even know they are being considered.
With this in mind, breaking down the imaginary wall between financial advisers and their elected representatives and regulators in the states is a strategic imperative for everyone in our industry.
By opening the lines of communication with these officials and helping financial advisers begin to build lasting relationships with them, we can make sure that the voice of independent financial advisers — and of Main Street investors — is heard, whenever a potentially damaging bill or regulation comes up for consideration in states across the country.
Dale Brown is president and chief executive of the Financial Services Institute Inc.