LPL Government Relations Advances Advisor Interests

With the support of LPL Financial’s top executives and a team of highly talented professionals, our Government Relations team has established a broad footprint and positive reputation among legislators and regulators across the country.

Under the leadership of Nicole Petrosino, senior vice president, LPL Financial’s Government Relations team partners with advisors on a mission to preserve and enhance access to personalized financial advice.

Putting advocacy into practice

Advocacy is all about building strong relationships and then leveraging those relationships to help policymakers understand our business and our perspectives. The Government Relations team represents nearly 21,000 financial advisors and millions of investors before our legislators and regulators in Washington, D.C., and in all 50 states.

LPL’s Government Relations team wants to be in a position to serve as a helpful resource to policymakers so that LPL can provide critical input on the issues that matter to us. On the federal level, the team focuses its efforts on members of Congress who sit on committees that have jurisdiction over issues that impact our business. LPL’s influence in Washington has grown tremendously since 2014.

Petrosino explains, “Congressional leaders want to understand the challenges and opportunities for independent financial advisors and institutional investment programs. Financial advice helps drive the economy and helps their constituents save for retirement. That is why it is important that you stay engaged and speak up because LPL shares your voice on what you believe will help your clients stay on track to pursue their financial goals.”

Each year, the team hosts several in-district meetings, bringing financial advisors in specific states together to meet with the members of Congress who represent them. They’re also able to bring members of Congress to meet with employees in our home offices. These events help bring LPL financial professionals and employees face-to-face with those in a position to craft policies affecting our business, and these moments are critical opportunities to convey our unique perspective when it matters most.

Often, these relationships may be leveraged when there are concerns with legislation or a regulation being proposed. As an example, with respect to the 2016 Department of Labor (DOL) fiduciary rule, many congressional offices reached out to the team at LPL to ask our perspective regarding the rule and our implementation plans. In addition to the DOL, the Government Relations team responded through formal and informal means to requests for comment by regulators such as FINRA, NASAA, and the Securities and Exchange Commission (SEC).

In addition to federal efforts, the team builds and maintains strong relationships with policymakers on the state level. In the past few years, states have become more active in proposing legislation and regulation in certain policy areas, such as fiduciary or best interest standard and independent contractor status. These areas directly impact LPL financial professionals and home office employees. The team works in partnership with members of our Compliance, Legal & Risk department — specifically with the Advice Advisory, Retirement, and State group, to advocate for the best result for advisors.

Everyone on the Government Relations team is committed to working closely with our financial advisors and subject matter experts across the firm to ensure that our views are being communicated clearly and effectively.

LPL Advisor Profile

Ken Van Leeuwen of Van Leeuwen & Company, and Mike Brady, LPL Financial advisor, are two advisors passionate about their involvement in advocacy.

Van Leeuwen says, “I believe we have made a tremendous difference. It’s not only an advisor speaking, but in many cases, a business owner as well. We provide members with firsthand knowledge of how our position impacts not only our clients and advisors but the business community we operate in.”

Brady says, “The LPL Government Relations team serves as a vital advocate on behalf of the over 20,000 LPL advisors and home office staff at the federal and state level. Being able to engage with members of our government in a meaningful way on all of our behalf is vital to the future success of your businesses, your clients, and our independent business model.”

Advocacy tools

The LPL Political Action Committee (LPL PAC) is an important tool for supporting the business goals and objectives of LPL. The contributions made by the LPL PAC help LPL foster relationships with those members of Congress who can help shape our industry. The LPL PAC is supported by eligible LPL Financial employees and advisors, who make voluntary personal contributions for the purpose of making donations to candidates for federal office.

In fall 2018, we launched the LPL 50-State Network, made up of LPL advisors and employees across the country. This grassroots network provides a local connection with policymakers in Washington, DC, as well as the states.

The power of the 50-State Network

The LPL 50-State Network utilizes the power of LPL financial advisors to bring attention to our various advocacy efforts.

With advisors in all 50 states, and nearly every congressional district, they are one of our strongest assets as a team. Together, we’re in a position to use our industry leadership to contribute to critical policy discussions that impact independent advisors and investors.

Over the past couple of years, 50-State Network ambassadors have met with officials at the U.S. Treasury, and testified before officials in Maryland and New Jersey on policy proposals. They’ve also signed on to letters to lawmakers at the Federal level, as well as in Nevada, Utah, Massachusetts, New Jersey, West Virginia, and Tennessee to use their collective voice to amplify policy positions on proposals. With the support and input from our national network of nearly 21,000 financial professionals, Petrosino is convinced that her team can help government officials to better understand the value of independent advice and the guidance our financial professionals provide to their clients.

Advocating for the investor

LPL Financial has long supported regulations requiring that investment advice be in the investor’s best interest. We have consistently voiced our support for standards that will protect investors by helping to ensure that they receive investment advice and recommendations that are fair and appropriate for their particular investment, savings, and financial needs. We also believe it’s important that financial institutions and professionals provide clear disclosures regarding the nature of their services, their fees and compensation, and material conflicts of interest so that investors can make informed choices about investment services and products.

At the same time, through the Government Relations team, we have urged that such standards and requirements be adopted in a way that preserves investor choice and access to a wide range of investment and financial services. Harmonized standards will reduce investor confusion and costs, facilitate compliance, and promote holistic investment services, advice, and planning. This can result in better savings and investment outcomes, regardless of whether investors are saving through a tax-qualified retirement account or a taxable account, and regardless of whether they receive advice from a broker/dealer or an investment advisor.

Supporting the SEC’s efforts

In 2019, the SEC finalized Regulation Best Interest, effective June 30, 2020, which requires broker-dealers to act in their customers’ best interest and provide full and fair disclosure of material facts and conflicts of interest. In addition, The National Association of Insurance Commissioners (NAIC) has adopted a model rule requiring annuity recommendations also be in the best interest of the customer.

Together, these two pieces of guidance lay the groundwork for a uniform workable set of rules that require all financial professionals to act in the best interest of their customers. We now must work to ensure that this sound structure is preserved.  However, concerns persist that actions at the state or federal level could disrupt this sound structure.

Through our advocacy efforts, LPL Financial will continue to push for a thoughtful resolution of this complex issue so that we may end the lingering uncertainty for our advisors and our collective business.

How you can get involved

Brady and Van Leeuwen both encourage other advisors to become involved and share the pride they feel about having a voice and participating in something so important.

To learn more about this group and the work they’re doing, you can email LPL Government Relations or visit the LPL Government Relations website.