J. French Hill is thinking through a challenge many financial advisers face — transitioning out of his practice — but is doing so not because of declining health or pending retirement. His change involves a possible career move to Capitol Hill.
Mr. Hill easily won the Republican primary in the 2nd U.S. House District in Arkansas earlier this summer and is locked in a competitive general election race against Democratic candidate Patrick Hays, a former mayor of North Little Rock.
Although he was attacked in the primary as a “rich banker,” Mr. Hill said he prevailed in that race because he established himself as the “business, common-sense conservative candidate.”
He is one of four financial advisers running for Congress or state-level political office who InvestmentNews
profiled earlier this year. One of those candidates, Brian Ellis, lost his bid to oust incumbent GOP Rep. Justin Amash in Michigan's 3rd District in a primary Tuesday.
Mr. Ellis' defeat brings to a close the U.S. House primary races involving the candidates IN tracked. The other person running for a congressional seat was Don Webb, an adviser at Wells Fargo Advisors, who finished well back in the pack in a Republican primary race in North Carolina's 6th District to replace retiring GOP Rep. Howard Coble.
Mr. Hill's general election contest is rated “lean Republican” by the website Real Clear Politics. The chairman and chief executive of Delta Trust & Banking Corp. in Little Rock is not taking anything for granted, but he has to consider the impact on his business of a possible win in November.
“We have begun to lay in place those contingency plans, if, in fact, the people in the 2nd District give me their trust to represent them in Congress — both from a managerial point of view and from a client access and oversight point of view,” said Mr. Hill, 57.
Internally, the transition includes mapping out a business operating system “that does not include me,” he said. On the customer side, he has to find the right person on his staff of advisers to take over accounts.
“For clients, [it means] making sure there's a very good fit between the client and an adviser that will be involved in helping them going forward,” Mr. Hill said.
He has to start the process now because he would have only a few weeks after the election to figure things out, should he win. Congressional rules prohibit lawmakers from working outside of their legislative post.
“There really isn't a middle ground,” Mr. Hill said. Members of Congress must “give up any other earned income, particularly in a fiduciary and advisory capacity.”
The time-management demands of running for office have already forced Mr. Hill to cut back involvement at his firm, which encompasses a community bank, broker-dealer, insurance arm and full-service trust department.
“I've minimized my daily engagement in client matters and tried to make sure those are handled by associates in our firm so that our clients continue to get the kind of hands-on attention they expect and deserve,” Mr. Hill said.
“I encourage all advisers who are over 55 to be thinking long and hard about how to care for their clients and their own personal financial transition,” Mr. Hill said. “It takes a lot of thinking and planning to do it successfully.”
Mr. Ellis, owner of Brooktree Capital Management in Grand Rapids, Mich., also tried to portray himself as a common-sense candidate, arguing that his competitor's voting recording didn't fit his Michigan district. Mr. Ellis garnered endorsements from business groups, such as the U.S. Chamber of Commerce, but ultimately lost, 57%-42%, to Mr. Amash in a
race that became bitter.
Mr. Ellis' campaign did not respond to a request for comment.
If Mr. Hill wins this November, he'll be one of the few members of Congress with a sophisticated understanding of what financial advisers do and how they're regulated.
For instance, he knows about the controversial customer-account-data-collection plan that the Financial Industry Regulatory Authority Inc. is developing.
Mr. Hill said he has concerns about its impact on “small firms who have a high degree of knowledge about both their employees and their client base. I will want to study the costs of such an idea compared to the potential benefits for the investing public.”
A Washington political analyst said Mr. Hill is the favorite to win his race in November because of antipathy toward President Obama in rural parts of the district.
“I expect that Obama will be the more dominant focus for voters and that Hill will win by a decent margin,” said David Wasserman, House editor of the Cook Political Report.
