Clients Ranting About Politics? How Financial Advisors Change the Subject. 

Jason Britton, president and chief investment officer, Reflection Asset Management: I’m a deep-dyed-in-the-wool Democrat who practices almost exclusively in the heart of Dixie here in Charleston, S.C. So my clients’ views and my personal views often are diametrically opposed. But I actually love those conversations. I don’t think they’re bad at all, because getting the client to be passionate about something gets them to take action. And if I can get them to take action, I can create a relationship, and I can keep them moving forward.

What I’ve found works is to give clients the opportunity to express their concerns or frustrations in their investment portfolio through separately managed accounts. I’ve created three different strategies, one of which became so popular outside of my home market that we turned it into an ETF. We basically have an S&P 500 sleeve developed for whatever kind of politics shows up at the door.

We use Federal Election Commission data to create model portfolios that are composed of companies that give 75% of their corporate PAC and their C-suite contributions to either Democrats—this is our [

Democratic Large Cap Core ETF,

or DEMZ]—or Republicans, with our REDZ strategy. And our NPAC portfolio is designed for those who don’t believe there should be money in politics, who don’t think either side is right.

Adam Phillips, managing director, investments, EP Wealth Advisors: When clients bring up politics, you have to manage the conversations tactfully. You never want a client to leave a conversation feeling like they weren’t heard or understood. It’s about acknowledging their concerns but also presenting the facts. In an election-season environment, facts are friendly. We tell our clients it’s important that they vote with the ballot, not their portfolio. It’s easy to say that, but it’s more helpful to actually give them the data. It suggests that historically it doesn’t matter a whole lot who’s in the White House; the market has performed well [under Republican and Democratic administrations]. It’s much more about the economy than election results. In those handful of times when the market has performed poorly under a certain administration, it has been more a factor of bad luck or bad timing.

Whether President Biden gets re-elected or former president Trump finds himself back in the White House, I think the next term will see an environment of monetary policy easing as well as a fiscal boost in the form of at least some extension of the 2017 tax cuts. These are the things that we should be focused on with our clients.

Bob Peterson, senior wealth advisor, Crescent Grove Advisors: The most important thing I’ve learned over the years is to first listen to the client to see what they’re saying. And the second part of that is the old sales tactic “know ‘no.’” So when you’re listening, you’re trying to understand, are they concerned? Are they venting? Or are they just looking for agreement?

Is it really the election that they’re worried about? Is it the president? Or is it their portfolio? So trying to get to the deeper reason of why they’re asking and then pivoting from there. With clients who are venting, a lot of times they want someone to vent to, and your job is to listen, tell them you understand, acknowledge that it’s a messy climate, and they’re not crazy that, yeah, it could get bumpy along the way. But then, of course, your job is to reassure them, turn to facts and remind them that, hey, the market’s been up in 20 of 24 election cycles for president. It’s about bringing them back to reality without getting political.

The hardest are the people who are looking for agreement. Your job as an advisor at that point is to pivot. You listen to it, you acknowledge, and you move on. You have to go in another direction because they’re just looking for someone to be their sounding board and nod and say, “Yeah, you’re right; that guy is terrible.” I hate to say it, but you have to just take a short pause, acknowledging it with that pause, and go on to the next subject. And I think clients get that feedback that you’re not engaging in the conversation. It’s awkward, but it’s only once in a while with a minority of clients.

Charles Flowers, chief investment officer and co-president, Abacus Planning Group: We actually spend a lot of time on this at the team level. I know it sounds odd, but we actually role-play conversations like this in advance. First of all, we have to be neutral and calm. And we listen. And we might say, “You sound worried, you sound concerned, you sound angry.” That’s key. Obviously, no one’s going to go anywhere with you until they’ve felt heard. And it’s not like you’re having to believe them. But you can say “I’m acknowledging your emotions.”

After that, depending on how much intensity is there, you can reframe back to the meeting. We’ve found that the stock market really only cares about making money; it goes up under both Democrats and Republicans. And sometimes that’s enough. The trap that we can get into as advisors is that we want to solve the problem 100%. But if there’s a lot of emotional intensity behind it, the best you can do is get them back maybe two or three steps. You’re never going to solve this, just because of the 24/7 news cycle. It can help to make an inquiry: What did you do last time this happened? How did you get through it? What are some things that you did that were successful? How did you navigate? We’ll pick apart some things that they did, and say, “All right, let’s try some of that.”

Write to [email protected]