State Advisor Landscape Snapshot

Another priority for state securities regulators this year, according to Borg, is voicing their opinions on the SEC's new conduct standards — namely Regulation Best Interest, which "is a good first start," but "has a long way to go."

Borg and state securities regulators also will be watching H.R.5037, the Securities Fraud Act of 2018, which he told The New York Times "is going to put investors at not only a disadvantage, but deep in harm's way." He later explained to IA, "This is a prememption bill. You've got a clear preemption of any state action — securities regulators, state attorneys general, anybody."

Types of Services Provided

While state advisors offer a wide variety of services, individual portfolio management tops the list (14,511), which the NASAA report states "makes perfect sense" given state advisors' heavy focus on retail (82%) vs. high-net-worth (18%). A majority of advisors, the report adds, round out their practice by offering broader financial planning services (14,511).

Most state advisors (14,755) still charge their clients a fixed percentage of assets under management as their fee. Over half (9,868) also charge clients on an hourly basis for core or supplementary advisory services, while comparatively few charge a commission (839) or a fixed fee (672), the report states.

Wall Street Pads Congress' Pockets Wall Street lobbying groups pumped $719 million in 2017 into fighting battles over cutting corporate taxes, rolling back consumer protections, and easing regulation of large banks, according to a report by Americans for Financial Reform. The AFR report notes that the 2017 figure puts Wall Street lobbying on pace to outstrip the record $2 billion it spent during the 2015-2016 campaign cycle.

The biggest spenders within the financial services industry include the American Bankers Association ($13.1 million), Citigroup ($5.9 million), Paloma Partners ($5.6 million), Goldman Sachs ($5.2 million), Renaissance Technologies ($5.6 million), and the Securities Industry & Financial Markets Association ($8.5 million), according to the 57-page report, "Wall Street Money in Washington."

Lisa Donner, AFR's executive director, told IA that "Wall Street shifted its campaign into a higher gear to reverse or undermine the [Labor Department's] fiduciary rule the moment it saw an opening after the 2016 election. It is not surprising to see one of the industry's biggest lobbying organizations ranking high on the list of groups that put millions of dollars into the political system."

The report draws on a special data set compiled by the Center for Responsive Politics for AFR "in order to provide a more precise look at financial services industry spending." As the data does not include "dark money" that goes mostly unreported, the actual sums of Wall Street spending are "surely much higher," according to the report.

Historically, in the first year of a non-presidential election cycle, only 25% of contributions came in the first year, and lobbying expenditures don't generally vary much over a cycle. "That pattern suggests the 2018 cycle will be, once again, a record-breaking example of Wall Street's determined efforts to suffuse the political process with money — and get a payoff from its investment," the report states.

The financial services industry reported spending $472,618,066 on lobbying in 2017, placing it in third place behind the "health" sector, which spent $555,010,906 and "miscellaneous business" companies and trade associations, which spent $503,758,285. —Melanie Waddell

Washington Bureau Chief Melanie Waddell can be reached at [email protected].