With Capitol Hill battles looming next year over broad tax reform and skirmishes related to the financial reform law continuing, LPL Financial wanted to have its own boots on the ground in Washington.
The independent broker-dealer
recently appointed Nicole S. Petrosino as vice president and head of federal government relations to establish the firm's first office in the nation's capital.
“It's pretty exciting,” Ms. Petrosino said in an interview this week. “LPL recognizes that the independent investment adviser needs to have a voice here in D.C. on the issues and policies that are going to have an impact on them. That's my job — to make sure the members [of Congress] and regulators hear their voice.”
One area where LPL wants to weigh in on is broad tax reform, an issue that likely will come up next year. LPL wants to protect tax incentives for retirement savings products, such as annuities, that could be curbed in order to finance reform.
“We know that members are looking for money for payfors,” Ms. Petrosino said. “It's going to the Hill and letting members know what people are buying and why they're buying it. These are products for people to enhance what they're putting into their 401(k) or when they don't have a 401(k).”
She's also concerned that Congress may try to tighten tax rules around independent-contractor status, which many of the firm's 13,800 financial advisers have.
“I really want to have an opportunity to get our advisers in front of their members,” Ms. Petrosino said. “When you can put a face to a story, it helps members click, especially if it's their constituent.”
Before joining LPL, Ms. Petrosino, 40, was a lobbyist for TIAA-CREF and MasterCard, a staffer in the George W. Bush White House and State Department and a congressional aide.
She will develop an agenda for her new job based on meetings with LPL financial advisers over the next few weeks.
Items sure to be on it include an effort to slow a pending Department of Labor conflicts-of-interest rule for retirement-plan investment advice and a push to get the Securities and Exchange Commission to propose a summary prospectus for annuities.
LPL has not yet determined the size of its Washington office. Ms. Petrosino anticipates two or three staffers. Although it will have its own Washington office, LPL won't necessarily end its membership in industry lobbying groups, such as the Financial Services Institute and the Insured Retirement Institute.
FSI president and chief executive Dale Brown said LPL will remain an FSI member, and its Washington presence will bolster FSI's lobbying.
“I think it's a positive development,” Mr. Brown said. “LPL has been a strong and effective supporter of FSI and our advocacy mission since Day 1. It's great that they're willing to invest these kind of resources to further the case.”
LPL is following a trend set by major companies such as Wal-Mart, Microsoft and Google in establishing a Washington outpost.
“A lot of companies, when they reach a certain size and have a national presence, are going to look at setting up a Washington office,” said Duane Thompson, a senior policy adviser for Fi360, a fiduciary training firm. “Even if they have effective representation through an association in Washington, sometimes they'll want a direct pipeline of their own. It does send a message that they've arrived, so to speak, in Washington policy terms.”
The firm has had some
big regulatory enforcement cases against it from the SEC and the Financial Industry Regulatory Authority Inc. over the past two years. Ms. Petrosino declined to address situations that predated her arrival at LPL and whether those were part of the impetus for starting the new D.C. office.
There's a limited amount of influence a Washington representative can have in the enforcement area, Mr. Thompson said. Most cases are handled by a firm's lawyers working with regulators. Where Ms. Petrosino might have an impact is if an enforcement issue becomes the foundation for legislation.
“It might be helpful to have someone who can have face time in front of a member of Congress or committee staff to explain the company's side of the story,” Mr. Thompson said.
