“It feels like this is the worst,” says Atlanta-based advisor Margaret Wright of Truist Financial. “But I remind clients that we’ve been here before. We just need to be that unemotional voice of reason—that’s a lot of the reason why people hire advisors.”
Spuds Powell, a managing director at $65 billion RIA Kayne Anderson Rudnick in California prefers in person meetings with clients rather than phone calls and his calendar has been filled.“At times like these with heightened levels of nervousness, over-communication is really important,”says Powell. “I’ve always felt that my most important role is to serve as financial psychologist for my clients during the inevitable times when they are worried or frightened.”
Though it isn’t found in wealth manager job descriptions, or taught as part of the curriculum for advisor’s standard licensing exams, the most successful advisors agree that lasting client connections are forged as much by personal relationships as they are by investment advice.
“Acknowledging feelings is very important: You don’t want to be dismissive,” says Melissa Weisz, an advisor at Corient, which manages $185 billion in client assets. “People are concerned and for legitimate reasons, regardless of which side of the aisle they sit on.” Like other advisors, she has recently been pointing to data that shows that historically, market’s don’t really perform better or worse depending on whether a Democratic or Republican is in the Oval Office.
“I tell clients who are nervous about the election that one person in charge doesn’t make the difference—there are checks and balances in government for a reason,” says Craig Findley, CEO of Ohio-based RIA Venture Visionary Partners, which manages just over $5 billion in assets.
Kayne Anderson Rudnick’s Powell points out that the S&P 500 has generated positive returns in 20 out of the last 24 election years. Truist’s Wright tells her clients that the benchmark index gained an average annual return of 13%, 14% and 17% under Obama, Trump and Biden, respectively—allowing her to demonstrate that there was a marginal difference between each administration.
Oftentimes, certain clients will want to discuss personal politics with their advisors. While big wirehouse firms have not issued edicts preventing the topic, or scripts to deal with difficult conversations, one advisor at a big wirehouse, who requested anonymity, said that internally firms consider it a “third rail.”
“I always tell people the two things I won’t discuss are politics and religion,” says North Dakota-based Ameriprise advisor Joel Bird, who manages $4 billion. “Politics get emotional and we try to keep emotion out of what we do.”
Others say the best way to remain an unemotional third party is really by knowing each one of your clients and their families. “You have to know what issues are sensitive to each client and be respectful of that,” adds Wright. “Find commonalities and hone in on that.”
Some advisors, meanwhile, take the opposite approach and embrace discussing personal opinions with clients. “If you have a good relationship, it is okay to disagree with a client, even about something as spicy as politics,” says RIA Powell, who apparently feels less encumbered than his wirehouse competitors. “A lot of folks in my shoes in my opinion make the mistake of saying I’m not going to engage with a client about politics because it is sort of a third rail.” Powell says he agrees with aspects of both the Democratic and Republican parties, so he finds it easy to genuinely and authentically accommodate conversations from both perspectives.
Corient’s Weisz says the real challenge is when clients have a bug in their ear and want to make portfolio decisions based on what they read in the news or hear from someone else. “That’s where doubling as a therapist comes into play—you have to be respectful but also ask, what is that person’s motivation? Are they a fiduciary (like me) and looking out for my clients best interests?” she says. “You have to have a strong enough relationship where you can ask the right questions and play devil’s advocate.”
As far as portfolio adjustments go, most advisors are encouraging clients to wait until after the election to make any significant moves. Still, not all investors have been sitting quietly on the sidelines. According to a recent TD wealth survey, one in five investors have already made portfolio adjustments ahead of the looming election. As volatility and uncertainty in markets persists, many of them, with the help of their financial advisors, have piled into tech stocks and alternative investments—such as private equity, private credit, hedge funds and real estate.
Some clients have also been saving up cash to deploy post-election, while others have been doing early tax-loss harvesting to get ahead of any uncertainty. Given that the Trump tax cuts end in 2025—and their renewal is in question, advisors agree that taxes are likely going up in the future.
“Let’s deal with information as it comes in,” insists Wright, who has been making a few tactical changes to her client portfolios recently. “We’re still actively managing, just not doing so around the newsfeed.”
Adds North Dakota advisor Bird, “The market goes up or down because companies make or don’t make money. Hating the president can’t be your investment strategy.”
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