Some of the most rewarding experiences my team and I at the Financial Services Institute encounter as advocates for our industry come when we see the proverbial "light'" click on for our adviser members and we get a front row seat as they grow from concerned professionals to
fully engaged citizen advocates for our cause.
We were privileged recently to see this extraordinary transformation happen for adviser member Bradley Brown of
Royal Paladin Group in Willoughby, Ohio.
As a high school student in Ohio, Mr. Brown first read Cervantes' classic "Don Quixote" and became taken with the concept of heroic, chivalrous knights doing battle for those in need, for championing a cause and doing what's right.
This passion has had a formative impact on his career as a financial adviser. When Mr. Brown left a position with a large wirehouse brokerage firm in 2010 to form his own advisory practice, he named it the Royal Paladin Group (a paladin is defined as "a knight known for heroism and chivalry"). His firm provides investment and
financial planning services with a focus on retirement planning. Mr. Brown is affiliated with First Allied Securities Inc. and First Allied Advisery Services Inc.
The image of the hero doing battle for good has been particularly top of mind for Mr. Brown since 2013, as he became engaged in advocacy for the first time to spearhead a critical issue before the Ohio state legislature.
"One of my clients set up a [Uniform Transfers to Minors] account for her grandson and unexpectedly passed away," Mr. Brown said. "Ohio state law did not provide for successor custodians like most other states, so the family faced bringing this account to probate court to name a new custodian. Other states allowed naming of successor custodians when setting up the account, so why not ours? I was determined to do all I could to help bring this important tool to the citizens of Ohio and, most importantly, to my other Ohio UTMA clients."
Mr. Brown reached out to FSI to see if we could help him work with the state legislature to somehow remedy the issue.
Working in close conjunction with our state legislative affairs team, Mr. Brown's determination to act led to a nearly four-year effort to lobby the Ohio House of Representatives to enact crucial reforms allowing greater flexibility in establishing successor custodians for UTMA accounts in the state.
His perseverance paid off on April 6, 2017, when the state legislature enacted the Ohio Transfers to Minors Act, which finally allows the naming of successor custodians, as well as making other important changes.
In a UTMA, donors gift funds to a minor who owns the account from the beginning. In the past, custodians could control the account past the age of majority — which is 18 in Ohio — until age 21. The new law allows the custodian to maintain control until age 25. (Many parents and grandparents seek to control such accounts beyond the "minor" account owner's 21st birthday, as many young adults are not yet fully independent or finished with college at that age.)
In addition, the new law enables an executor or trustee to establish a custodial account for a minor to receive an inheritance of up to $25,000 without court approval. Previously, the limit was $10,000.
Early in the advocacy process, our state legislative affairs team took the critical step of connecting Mr. Brown with Heather Bishoff, a financial adviser and FSI member who was serving at the time as a representative in the Ohio state legislature.
Ms. Bishoff worked with Mr. Brown to research the issue and draft new legislation. Mr. Brown, in turn, connected both Ms. Bishoff and Michelle Carroll Foster, FSI's associate vice president of state affairs, with the fund company that handled his clients' accounts, American Funds.
Over the course of more than three years, the parties worked to craft legislation that would be more accommodating to clients' needs.
Advocacy is not easy, but Brown's experience shows that one adviser — with FSI in his or her corner — can make a real difference in influencing legislation and regulation that impact our industry. We were proud to have played a key role in securing this win for advisers and their clients in Ohio.
Mr. Brown says the years-long effort was well worth it.
"I have learned in life that if something is right and useful, it's worth putting in the time and effort. It's like Quixote tilting the lance at the windmill — except that we truly can make a real-world difference," he said. "For me, this was one of those 'windmill' projects that seemed daunting, even impossible at the beginning, but one just has to lower the lance and charge! I am extremely grateful that FSI took up this challenge with me. Without FSI, that giant would still be blocking many Ohioans'' way."
(More: FSI aims for workable best-interest standard this year)
Dale Brown is president and CEO of the Financial Services Institute.
