Midterm Elections' Outcomes Leave Financial Advisors Mostly Happy
Advisors are mostly optimistic about the outcome of the midterm elections, in which the Democrats took over the House of Representatives and the Republicans held on to the Senate, creating a divided legislature, much as had been predicted by pollsters and analysts, WealthManagement.com writes.
The balance of power created as a result is bound to bring about “constructive legislation,” Debra Brennan Tagg, president of Brennan Financial Services in Dallas, tells the web publication.
But Raul Elizalde, president of Path Financial in Sarasota, Fla., isn’t happy with the result because financial advice clients “would benefit from a government that works, is not mired in gridlock, and finds solutions to important problems affecting our country,” he tells WealthManagement.com.
Democrats are likely to take a “more fiscally conservative direction” following the Republican’s “fiscal largess” —which means the economy could slow, Elizalde says, according to the publication. But that only means financial advisors will have an even bigger role to play protecting clients’ investments and savings, he tells WealthManagement.com.
Overall, however, most advisors say the election will not not have much of an impact on how they do business, according to the web publication. And most have stayed away from the heated political back-and-forth permeating the midterms, WealthManagement.com writes.
“I always avoid discussing politics (and religion) with my clients,” Jonathan Torrens, president and chief investment officer at TCM Wealth Advisors in Fairlawn, Ohio, tells the web publication. “I feel it is unwise to mix your politics with your portfolio.”
As far as regulation concerning advisors, the midterm outcome is more mixed, according to InvestmentNews.
Even though Rep. Maxine Waters, D-Calif. — a vocal critic of the SEC’s proposed Regulation Best Interest — will likely take over as chair of the House Financial Services Committee, “any substantive legislation on a fiduciary advice requirement is going to run into a buzz saw” in the Senate, Duane Thompson, senior policy analyst at fiduciary training firm Fi360, tells the publication.
On the other hand, thanks to Democrats taking over several state governor positions, there may be more movement on a fiduciary standard at the state level, Thompson tells InvestmentNews.
And with Waters overseeing the House Financial Services Committee, the SEC may move on legislation to define more advice practices as small businesses when considering its regulations’ impact, since Waters worked with current committee chairman Jeb Hensarling, R-Texas, to approve a bill earlier this year to do just that, the publication writes.