Campaign spending up among advice groups

Brokerage, insurance and mutual fund groups spend more money than investment advisers in quest to gain the ear of lawmakers on both sides of the political aisle.

Feb 21, 2017 @ 2:13 pm

By Mark Schoeff Jr.

Interest groups representing investment advisers, brokers and insurance agents increased their campaign donations to federal lawmakers over the last two years, as Washington's influence on the advice industry has grown.

One of the organizations stepping up its political spending, according to its filings with the Federal Election Commission, was the American Council of Life Insurers. The ACLI increased its contributions to members of Congress from $663,600 in the 2014 election cycle to $1.3 million in the just-concluded 2016 cycle.

The organization has spent more on campaigns as federal lawmakers have paid more attention to issues affecting its 290 member firms, such as tax reform, trade and retirement security, according to Maurice Perkins, ACLI senior vice president for federal relations.

Although states are the primary regulators of the insurance industry, Congress is becoming more active in the sector.

"We are certainly expanding and broadening our education focus to the federal side," Mr. Perkins said. "The better we do it, the better our products and industry are known."

Another insurance group, the Insured Retirement Institute, also has made more contributions to lawmakers' campaigns over the past two years. In the 2014 cycle, IRI spent $139,300 compared with $223,700 in 2016.

A primary reason for the increase is the interest Congress is showing in retirement-income policy, according to Paul Richman, IRI vice president for government affairs.

For instance, the Senate Finance Committee approved a bill late last year that included provisions on the use of annuities in retirement plans. The measure did not become law and has to be re-introduced this year.

"There are a lot of champions out there who are interested in taking up these issues and moving them forward in legislation," Mr. Richman said.

Lobby and campaign spending by advice industry trade groups
Source: Federal Election Commission.

Making contributions to a lawmaker's political action committee gives a group like IRI another opportunity to meet with him or her beyond a sit-down in a Capitol Hill office.

"It allows us to develop relationships by attending [fundraising] events and promoting IRI and what we stand for," Mr. Richman said.

The Financial Services Institute, which represents independent broker-dealers also increased campaign spending: $332,500 in 2016 compared with $286,000 in 2014.

The trade associations that represent the brokerage, insurance and mutual fund industries spend more on campaigns and lobbying than investment-adviser groups.

For instance, the Securities Industry and Financial Markets Association donated $800,750 to 2016 campaigns and spent $7.4 million on lobbying. The Investment Company Institute, which represents the fund industry, spent $1.9 million on campaigns and $4.9 million on lobbying in 2016, while the National Association of Insurance and Financial Advisors spent $2.4 million and $2.3 million, respectively. No investment-adviser trade group spent more than $190,000 on lobbying in 2016.

The Financial Planning Association has increased its giving to congressional campaigns. The group's political spending rose from $57,500 for the 2014 election to $81,500 for the 2016 election.

Karen Nystrom, FPA director of advocacy, said that there is no direct correlation between campaign donations and how a member of Congress votes. But donations do help open the door for meetings with lawmakers.

"A PAC doesn't buy any influence," Ms. Nystrom said. "It does help us have those conversations on and off the [Capitol] Hill."

A major lobbying issue for each trade association over the last couple of years has been the Labor Department's fiduciary-duty rule. Insurance and brokerage groups have been encouraging lawmakers to block the regulation, while FPA has been working to protect the measure.

Even though it's mostly Republicans who back efforts to kill the DOL rule and Democrats who defend it, FPA and the other groups give in a bipartisan way. They tend to spend more on Republicans than Democrats, according to the Center for Responsive Politics, because Republicans hold the majority in the House and Senate.

"We don't want to have any whiff of partisanship in our giving," Ms. Nystrom said. "It's important to be heard on both sides. You can't just talk to those who agree with you."

The FPA also increased its lobbying spending over the last two years — from $45,000 in 2015 to $60,000 in 2016. Much of the expenditure supports the group's Capitol Hill advocacy day, which last year drew about 65 FPA members who visited more than 100 legislative offices. Most trade associations host similar lobbying events.


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