FSI Grassroots Champions

This summer, more than 20 FSI members came together in Washington, D.C., for in-person meetings with members of Congress led by FSI, hoping to make the voice of the independent financial advisor heard. Though some were not sure what to expect from the experience, they came away convinced that FSI and its community of engaged financial advisor members are making a powerful difference on the regulatory and legislative issues that impact our industry.

“It was eye opening to see how well-known and highly regarded FSI is on Capitol Hill,” said Adam Malamed, Chief Operating Officer of Ladenburg Thalmann Financial Services. “To actually sit in on meetings with people in Washington who know FSI and our issues helped me understand how much work is being done to advocate on our behalf.”

The June visit was the latest in a series of coordinated efforts by FSI to help its members meet with lawmakers from both sides of the aisle. Divided into six groups, each including a member of the FSI team, advisors had the opportunity to speak directly with elected officials in both the House of Representatives and the Senate to relay their concerns about key issues impacting independent financial advisors and their clients.

The principal focus of the discussions was the Department of Labor’s (DOL) initiative to redefine the term “fiduciary” – a rule that would effectively ban the earning of a commission for IRA advice.

Steve Allison, President of SR Allison, Ltd., a Fort Worth, Texas-based affiliate of Investacorp, embraced the chance to meet with members of Congress and their staffs. Allison said he eagerly shared his thoughts on the DOL issue during his conversations with Rep. Jeb Hensarling (R-TX) and others.

“Every time the DOL or Congress proposes something like this, they fail to look at the long-term effects it will have, not only on the industry but on our clients as well,” he said.

Allison said that his client base, comprised largely of employee stock ownership plans (ESOPs), would be hit particularly hard by the DOL’s proposal. Many ESOPs – which are frequently used by well-established and profitable small business owners to fund their retirement and reward loyal employees – could see their expenses drastically increased under the DOL’s re-definition of fiduciary, he said.

The loser in that scenario, according to Allison, is the American investor.

Summarizing his conversations on Capitol Hill, Allison said, “I requested that the legislators keep an eye on the process and make sure that the DOL doesn’t ultimately create problems for us as an industry and for our clients. Overall, the lawmakers I met with understood our side of the issue.”

For many, including Malamed, the highlight of the visit to Washington was watching FSI President and CEO Dale Brown testify in front of Chairman Spencer Bachus’ (R-AL) House Financial Services Committee as an expert witness on the need to create an independent regulator for registered investment advisers. Brown’s testimony underscored FSI’s ever-growing influence on Capitol Hill.

“I was fortunate to see Dale testify before the Committee, and witness first-hand his effective advocacy on our behalf,” Malamed said. “His presentation was thorough and compelling.”

While meeting with members of Congress was a new experience for John Egan, President of JM Egan Wealth Advisors in Madison, N.J., it was an opportunity he relished, saying it inspired him to participate more in the process.

“Prior to going, to be honest, I hadn’t been as involved personally,” Egan said. “I read the material FSI sent me, and I was happy they were an advocate for me. But now I’m watching things much more closely after being involved firsthand, because the experience made me realize that I can make a difference.”

After his productive meetings with Rep. Rodney Frelinghuysen (R-NJ) and others, Egan had a quick answer ready when asked what he would tell another FSI member who had the same opportunity to go to Washington.

“Go,” Egan said. “Sign up, don’t even think about it.”

Overall, Malamed said the FSI-led meetings with lawmakers helped him understand the difference between having a tangible, permanent voice in Washington and sending the occasional letter to a Congressional representative. He emphasized that FSI’s value in engaging lawmakers on the issues that are important to our industry should not be underestimated.

“FSI is our voice in Washington,” he said. “They are passionate, they are heard and they are respected.”


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