In unity there is strength

Relying on a custodian — no matter how well intentioned — to take the lead in lobbying is not a sound idea
FEB 08, 2015
Tired of seeing investment advisers outgunned by brokers in the world of Washington politics, TD Ameritrade Institutional has announced that it is working on an online tool that would give advisers an easy way to reach out to their elected officials and government policymakers. Think of a website where advisers could enter their ZIP code and instantly get email addresses and other contact information for congressional members and key policymakers. Also available could be templates of advocacy letters, as well as information, news and blogs on regulatory issues relevant to advisers. It's a good idea, but why did a custodian have to come up with it? Yes, custodians have a stake in seeing registered investment advisers thrive, but RIAs themselves have a bigger stake in their success. In terms of lobbying, brokers outspend RIAs many times over. The Securities Industry and Financial Markets Association, alone, spent $7.4 million last year, according to the Center for Responsive Politics. In contrast, one of the leading groups representing RIAs, the Investment Advisers Association, spent $50,000.

"WANT TO HEAR MORE'

And don't think heavyweights in the capital don't notice the discrepancy. According to Skip Schweiss, managing director of adviser advocacy and industry affairs for TD Ameritrade Institutional, a member of the Securities and Exchange Commission said, “We don't really hear from advisers very much, but we hear from brokers a lot. We want to hear more from advisers.” Investment adviser groups have an umbrella organization, the Financial Planning Coalition, to speak with one voice on vital topics, such as the fiduciary standard. Perhaps this is the moment for the members, which include the Certified Financial Planner Board of Standards Inc., the Financial Planning Association and the National Association of Personal Financial Advisors, to pool their lobbying dollars to increase their impact in Washington. Relying on a custodian — no matter how well intentioned — to take the lead in lobbying is not a sound idea. There may be times when the custodian's goals are in conflict with the advisers'. The industry needs to step up to the plate and take ownership of this important responsibility.

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