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Brokerage Industry Intensifies Lobbying Efforts

May 14, 2015

The brokerage industry isn’t taking any chances with proposed regulations, raising their lobbying commitments across the board and spending more than any other financial advice sector this year, InvestmentNews writes.

Sifma leads the pack among brokerage industry groups, spending $1.98 million on lobbying in the first quarter, according to data filed with the Office of the Clerk of the House of Representatives and cited by InvestmentNews. That’s an increase from the $1.88 million the group spent in the last quarter of 2014. Meanwhile, the National Association of Insurance and Financial Advisors spent more than $700,000 in the first quarter while the Financial Services Institute spent more than $170,000, according to InvestmentNews.

The industry’s main focus has been the proposed Department of Labor rule requiring brokers handling retirement accounts to adhere to the higher fiduciary standard. The success of this lobbying is evidenced by the fact that the Senate Democrats have now asked the DOL to extend the comment period, Duane Thompson, senior policy adviser for Fi360 told InvestmentNews.

In 2013 and 2014, financial institutions spent more than $1.4 billion on influencing the government, according to Americans for Financial Reform data cited by The Charlotte Observer — more than any other industry except entities classified as “miscellaneous business.” Among the wirehouses, Wells Fargo is the leader in federal lobbying.

According to Center for Responsive Politics data cited by the newspaper, the firm has spent $6.4 million on lobbying in 2014 and is likely to beat out its peers this year as well. It has also grown its lobbying operation from three in-house professionals in 2008 to 7 this year, according to the paper. Bank of America, meanwhile, spent $3.1 million in 2013 and $2.7 million in 2014 on lobbying, according to the paper.

In large part, high spending is virtually guaranteed for the foreseeable future because 40% of the rules still required by Dodd-Frank have not been finalized, according to Davis Polk & Wardwell data cited by The Charlotte Observer. According to an Americans for Financial Reform report cited by the paper, the lobbying is geared toward repealing or getting exemptions from new rules or changing them before they are implemented. Not all of the lobbying is geared toward more leniency from regulators, however. Banks have also lobbied the U.S. Congress to allow better access to information on cyber security, the paper reports.

By Alex Padalka
  • To read the Charlotte Observer article cited in this story, click here.
  • To read the InvestmentNews article cited in this story, click here.