AllianceBernstein has broken ranks with the Securities Industry Association over the issue of Social Security reform. The money manager sent a letter to the SIA last week asking it to "cease all funding" to groups lobbying on the issue. The SIA is a member of Compass, a high-profile support of the Bush administration efforts to overhaul the nation's retirement system.

The Los Angeles Times obtained a copy of the letter and published excerpts in its Monday edition.

The letter, which was signed by Sanford C. Bernstein & Co. CEO Lisa Shalett, stated that some people view the efforts as "politically motivated and polarizing" and argued that they do "not represent the collective views of the SIA constituents." It also called on the SIA to "formally issue a statement of complete neutrality" on Social Security reform, including private accounts.

"Given the divergence of views among the member firms and the complete lack of unanimity that we have, it seems inadvisable to maintain our recent posture," wrote Shalett. She added, "we serve our clients by devoting our energies to reacting to and interpreting public policy, and not by aggressively attempting to shape the course of public debate."

The SIA board, on which Shalett holds a seat, is set to meet this week.  

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