People have always been passionate about politics, but partisanship has become much more extreme and unpleasant in recent years. Consider an August 2022 Pew Research Center survey, in which a growing percentage of Democrats and Republicans describe members of the opposing party as more immoral, dishonest, and closed-minded than other Americans.
Financial advisers are regularly briefed by clients on policy and other current topics, if permitted. But advisors’ job is to give financial advice, not listen to Thanksgiving-style tirades. So for this week’s Big Q, we asked advisors: what do you do when clients go on a rant about politics or other topics?
Nancy DaoudPrivate Wealth Advisor, Ameriprise Financial: Operating very strongly in New York and the Bay Area of California, it’s kind of a thing at every meeting. When they start to get to the bottom of it, I stop them and say, “Look, I’m an immigrant, and it’s a very foreign concept for me to even understand the differences between a Republican and a Democrat. To me, you are all Americans, just like me. As far as I’m concerned, none of this makes sense. But what we should understand better are the financial implications of each party and how that relates to you, because that’s what’s really relevant in this conversation.
Scott TirasChairman, Tiras Wealth Management (Ameriprise): Much like at a family Thanksgiving meal, it’s usually best to stay away from guest conversations about religion and politics. However, politics is a topic that comes up a lot here in Texas, and it’s a little more one-sided. It’s usually easy for me to navigate when I focus on the underlying topics. And being a moderate, I can generally relate to both points of view. Although conversation can be difficult, I allow clients to let off steam and listen to their concerns.
But I hasten to remind them that historically, US politics has had little to do with market performance: statistics show that market returns are very similar under both types of administration. We try to turn and redirect attention to the most impactful realities like the Fed, supply chain disruption, war in Ukraine, etc.
Victoria Greene, Chief Investment Officer, G Squared Private Wealth: Politics can be a very quick way to lose a customer or prospect. You need to think like a doctor or surgeon and focus on the problem, not the noise. In reality, politics moves markets much less than people think. Markets fare better under a divided and balanced government, as they prefer stability to a major overhaul.
As a general rule, it’s best to let customers talk about their concerns and then figure out what really worries them. For some of them, you can provide historical context. Other times you may just need to redirect. You can’t underestimate how personal and fervent politics has become for some people. They need to be recognized and heard.
But we’re not supposed to be yes-men. We are here to give good and sound advice. Some of them may need to be put into context or conveyed correctly to be heard. But the best discussion is when you educate them with facts, data, and historical context to help put their concerns into perspective.
Kevin Myeroff, Principal, Senior Strategic Director, Sequoia Financial Group: Half of our clients are Democrats and the other half are Republicans, so this stuff comes up all the time. I have divided the political subjects into two different groups. One is economic and financial policy, and the other is global warming or abortion or things of that nature. Economic and financial matters are easy because I believe I can give an unbiased perspective on how things such as proposed changes to Social Security or inheritance taxes may affect you. So I discuss their situation, and I talk about their situation. I have no other view than, if you were my client and you had to pay $100,000 more in taxes, I would say “that sucks for you”.
The hardest thing is everyone else. These questions are almost always emotional, and people have strong opinions that they really want to share. My tactic is to acknowledge that I hear what they are saying and have empathy. If you said to me, “Kevin, Trump is the biggest asshole I’ve ever seen in my life,” I’d say, “I hear what you’re saying. And I understand your point of view. And it usually should never go any further than that. I’m lucky because I’m a centrist. I can understand the points of view on both sides.
Matt Gulbransen, President, Pine Grove Financial Group: Shipping politics is always a touchy subject, but unfortunately the markets have never been so aligned with political politics. It is therefore essential. Customers may want our perspective, and if it leads us to share certain thoughts on political politics, we have to. For example, passing stimulus or increasing the budget does not help reduce inflation. However, Republicans and Democrats are responsible for getting us to this point. Avoiding the subject is unrealistic.
For me, I do my best to accept all opinions, whether I agree or not. Because we have a good relationship with clients, we tend to know where they stand politically, so you can usually be prepared to chat or avoid hot-button issues. I have several conversations with clients who feel different on a specific political issue, but I have never felt it has hurt our relationship or made it uncomfortable to advise them. I guess I’m lucky to have good clients.
John Ippolito, President, New York Tri-State Region at BNY Mellon Wealth Management: It’s really a clever dialogue with customers. It’s not our job to always agree with their views. It’s about hearing them out and countering them with what we know is the best advice for them. There are people who have strong opinions about a variety of things – the economy, political parties, types of investments – that can cloud their judgment. And this potential bias is extremely dangerous for them. So countering that, using the right soft skills, is really essential.
We want to be thoughtful and seek to understand what they think about almost everything. But we obviously don’t want anything to take over a one-way meeting while our clients pay us for broader advice.