Broker groups step up political spending early in election cycle

Groups representing brokers and investment firms have stepped up their political spending this year, while adviser advocates have slowed down their campaign contributions. The Securities Industry and Financial Markets Association, the major industry trade organization, contributed $261,198 to political campaigns of House and Senate lawmakers from Jan. 1 through June 30, according to Federal Election Commission filings. That's $30,000 more than SIFMA spent at the same point in 2013. The Investment Company Institute, which represents the mutual fund industry, has spent $840,706 on campaigns this year, up from $759,436 through June 2013. In their political contributions, groups typically give to both Republicans and Democrats on committees with jurisdiction over securities laws, such as the House Financial Services Committee and the Senate Banking Committee. The Financial Services Institute, a trade group for independent broker-dealers and financial advisers, has given $47,000 to political campaigns this year, compared to $34,500 for the first six months of 2013. Another group that represents brokers and insurance representatives has maintained a steady but strong political spending clip. The National Association of Insurance and Financial Advisors has donated $455,425 to legislators' campaigns this year, compared to $456,790 in 2013. The campaign activity among organizations that represent investment advisers has been quieter. The Investment Adviser Association contributed $6,000 to campaigns through June 30, compared with $12,000 at the same point in 2013. Neil Simon, IAA vice president for government relations, said IAA's total contributions are up to $12,000 for the year, when spending after June 30 is included. The Financial Planning Association has not made political contributions this year. By this time in 2013, it had spent $1,000. Karen Nystrom, FPA director of advocacy, wrote in an email that the group has “retooled our distribution strategy” for its political action committee, which has slowed its campaign spending. FPA's contributions should increase later this year. The group held a PAC event on June 23 in Washington. “You will see our number uptick in the next reporting time,” Ms. Nystrom said at a media availability prior to FPA's Capitol Hill advocacy day last month. One of the issues animating the election cycle is a Labor Department proposal that would require brokers working with retirement accounts to act as fiduciaries. It is opposed by SIFMA, ICI, FSI and NAIFA. The DOL says the rule is needed to protect workers and retirees from conflicted advice that puts them in high-fee investments. Opponents argue it would significantly increase liability risk and regulatory costs for brokers and potentially force them to stop servicing small retirement accounts. The debate is being waged on Capitol Hill. Earlier this week, 22 Republicans on the House Education and Workforce Committee sent a letter to Labor Secretary Thomas Perez, asking him to withdraw the rule. Also this week, 14 House Democrats, four of whom are ranking members of their committees, wrote to Mr. Perez in support of the rule.