Clinton’s and Trump’s Popularity Falls with Advisors
Elite financial advisors seem to think a Donald Trump presidency would be bad for investors, a new survey by the Financial Times and Ignites Research has found. But even with his popularity falling, more FAs believe he would be better for their clients’ portfolios than his Democratic rival, Hillary Clinton.
The poll's findings point to advisors’ extreme views on the two major-party candidates.
Just over a fifth (22%) of brokers and RIA-based advisors think Republican Trump’s presidency would be positive or very positive for investors, compared to 12% who think a Clinton presidency would be positive or very positive, according to a survey of 502 financial advisors conducted in August and September.
Cory Krebs, chief operating officer at CooksonPeirce Wealth Management in Pittsburgh, has a theory about Trump’s higher standing with his peers in the industry.
“Advisors tend to be wealthier white Republicans,” says the wealth manager, whose employer is an FT 400 firm that manages $985 million. “So they’re usually demographically and philosophically leaning to more conservative candidates.”
Nor is Krebs surprised that support for Trump among elite advisors hasn’t waned much in recent months — even as more revelations about the Republican challenger’s business and personal background have come to light.
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It’s been a negative campaign from the outset, he says. In this context, revelations coming in at this late stage — however damning — won’t do much to move the needle for die-hards in both camps.
Greg Lathrop, an FT 400 advisor with Lathrop Investment Management in Little Rock, Ark., agrees it’s reasonable to believe more advisors favor Trump.
“If you boil it down, most advisors probably think a Trump approach is effectively to lower taxes while Hillary’s plan leans more towards raising taxes,” he says.
But, adds Lathrop, whose firm manages more than $500 million, the wealthiest families already pay “a disproportionate burden of the overall U.S. tax bill.”
Lathrop’s first job after college was with the IRS. He still remembers his shock on learning the “real” distributions of taxes paid by different income levels.
“As financial advisors, we’d be fools if we didn’t invest in ways that maximize the most efficient taxable gains rates,” he says.
So Trump’s apparent practice of taking huge tax losses on his business interests in the past probably wouldn’t unsettle advisors, he says.
But Lathrop worries many FAs assume Trump will be an effective cost cutter.
“I don’t believe he has the personality to convince members of Congress who don’t agree with him on much of anything,” he says. “I don’t see him as a great coalition builder.”
So no matter who wins next month, Lathrop sees Beltway gridlock continuing.
The FT poll shows positive opinions of the candidates have remained relatively stable in the advisor community over the past few months. A survey conducted by the FT in June and July found that 25% of advisors thought Trump would be positive or very positive, compared to 10% who thought the same about a Clinton presidency.
But while in the latest survey around 22% of respondents see Trump as the preferred candidate, 44% of respondents believe Trump would be negative or very negative for investors if elected, compared to 37% who thought so in the June and July survey. Meanwhile, 32% said a Clinton-led White House would be negative or very negative for investors in the latest survey, compared to 30% previously.
A majority of advisors (56%) are still neutral on Clinton – down from 60% who were neutral in the previous survey – and 35% are still neutral on Trump, dropping from 37% who were neutral in June and July.
Cherry Street Partners
Paul Lambert, an FT 401 retirement advisor and president of Cherry Street Partners in Denver, says he’s having a lot of political discussions with clients right now.
“It’s a positive and helps me to learn more about the families we’re serving,” says Lambert, whose firm manages $300 million. “So we don’t see anything negative with that – as long as they’re discussions, not shouting matches.”
While Lambert remains open to different election news twists, he hasn’t changed his view. And for the most part, his clients are “split 50-50” between Trump and Clinton.
The vast majority of his clients are retired or active business owners.
“Thinking that people just automatically vote one way or the other is a misconception,” he says.
Yet his own convictions remain steadfast: “I wouldn’t vote for Trump if you paid me.”
This view comes out during client discussions, but he characterizes such conversations as “fun and enriching.” Frankly, he adds, “any client who isn’t interested in who I am as a person, I probably won’t have much interest in working with down the road.”
The FT survey polled brokerage-based advisors who on average manage $1.6 billion and have 26 years of experience, and advisors with RIAs who on average manage $2.6 billion and have 22 years of experience.
Most of the latest scientific polls put Clinton ahead of Trump among likely voters. A poll conducted for CBS News by research firm SSRS mid-October showed 47% of likely voters support Clinton while 38% support Trump.
Released Tuesday, NBC News’s Weekly Election Tracking Poll – a non-probability survey of 24,408 likely voters – gave Clinton a six-point lead over her Republican rival.
Clinton and Trump will face each other Wednesday evening, October 19, for the final of three presidential debates of the 2016 general-election campaign. The debate takes place at the University of Nevada, Las Vegas and will be moderated by Fox News's Chris Wallace.