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September 10, 2020 at 03:11 PM
Don’t mix politics with investing. It’s an adage that most advisors abide by, but a new survey from Hartford Funds finds that many investors take a different approach.
An online survey of 872 investors with at least $100,000 in investable assets conducted in early August found that 75% discuss politics with their financial professional and 57% believe it’s important that their advisor’s political view aligns with their own.
Forty-four percent said they would switch financial professionals if there were no such alignment.
Advisors should be prepared for clients to initiate such conversations, says John Diehl, senior vice president of applied insights at Hartford Funds who is well-known for his collaboration with the MIT Age Lab on longevity issues for investors.
Advisors “ought to anticipate what they would say” when the conversation does come up. “They should prepare as they would for any client meeting.”
Younger investors especially are looking to connect with their financial professional for insights and expertise beyond the usual financial guidance, according to Diehl.
Ninety-one percent of younger investors surveyed said that it’s very or somewhat important that they share similar political views with their advisor and 68% would consider changing their advisor if that were not the case. Those two percentages were about two-thirds less for older investors.
Handling These Issues
Advisors might respond to these “out of the box discussions” with clients by noting that it’s not their practice to allow personal preferences to get in the way of their services, says Diehl.
Or they might ask their client why they feel so strongly about a political topic or party and use that opportunity to share some of their own experiences and how they influenced themselves in a certain way.
