Mitt Romney may have trouble convincing some Republicans of his conservative bona fides, but his emergence as the GOP presidential front-runner is just fine with investment advisers, many of whom think that he has the best chance of beating President Barack Obama.
Mr. Romney took an important step toward becoming his party's standard-bearer by edging out former Pennsylvania Sen. Rick Santorum in the Iowa caucuses last week. Mr. Romney is now the favorite to win the New Hampshire primary tomorrow.
One investment adviser said that Mr. Romney's success in passing a comprehensive health care reform plan in heavily Democratic Massachusetts, where he served as governor from 2002 to 2006, is one reason she backs him for the GOP nomination.
“That showed someone who could work with the other side,” said Laurie Stegenga, president of Foresight Capital Management Advisors Inc. in Grand Rapids, Mich. She characterizes Mr. Romney as a “middle-of-the road Republican.”
David Mendels, director of planning at Creative Financial Concepts LLC in New York, also supports Mr. Romney because “his positions are less radical and more coherent” than those of his opponents.
Mr. Mendels is undecided about his vote for president, but he said that Mr. Romney has set himself apart from other GOP contenders as someone who could build the consensus needed to address major national problems.
“Moving forward as a country means working with everyone in the country, not just those who happen to agree with you on a particular subject,” Mr. Mendels said.
Those reactions to Mr. Romney are reflected in an online poll of 332 InvestmentNews readers last week. Forty-five percent of the respondents backed Mr. Romney for the GOP nomination, while 15.7% supported former House Speaker Newt Gingrich and 13% were behind Mr. Santorum.
Mr. Romney also came out ahead on the question of who would present the most formidable challenge to President Obama in the fall, garnering 56.3% of votes, compared with Mr. Gingrich's 17.2%.
Of course, investment advisers' political opinions are as varied as their portfolio recommendations. And Mr. Romney has his doubters.
“While Mitt Romney seems to be the leading contender, it is obvious from his lackluster showing in Iowa that even Republicans are not excited by him,” Howard Pressman, a financial planner at Egan Berger & Weiner in Fairfax, Va., wrote in an e-mail. Mr. Romney beat Mr. Santorum in Iowa by just eight votes, 30,015 to 30,007.
“He really is the human version of oatmeal, just blah and not much to be excited about,” Mr. Pressman said of Mr. Romney. “I don't see him being able to generate enough enthusiasm to unseat the president.”
Although he's clearly the frontrunner, Mr. Romney does not have the nomination wrapped up. If he is overtaken by Mr. Santorum, Mr. Gingrich, Texas Gov. Rick Perry or another candidate in primaries later this month in South Carolina and Florida, the race will remain in flux.
Noel Swain, president of ProVest Wealth Advisors in Spartanburg, S.C., will be able to express his support for Mr. Gingrich in the state's primary Jan. 21.
“I believe he'll try to do more to reduce spending than will Romney, who is my second choice,” Mr. Swain said.
Like many primary voters, however, he's not enamored of anyone on the GOP ballot.
“I don't have a great deal of enthusiasm for any of the Republicans because we're trying to judge everyone against [President Ronald] Reagan, who is dead,” Mr. Swain said. “This is a thin crowd this year.”
The candidates vying for the GOP mantle all endorse cutting taxes, reforming the tax code and slashing the federal budget.
Mr. Romney and Mr. Gingrich would make the Bush tax cuts permanent, while Mr. Romney would eliminate capital gains and dividend taxes for people earning less than $200,000. Mr. Santorum would reduce the capital gains rate to 12%. Mr. Gingrich proposes an optional 15% flat tax.
Each of them will strive to convince primary voters that he is the most conservative. That could undermine the eventual nominee by forcing him to run so far to the right that he will alienate independent voters, according to Bedda D'Angelo, president of Fiduciary Solutions Inc. in Durham, N.C.
“The Republican Party is imploding on itself,” she said. “I'm a conservative in the center, and I believe people should work together.”
Ms. Stegenga said that tackling the massive federal budget deficit will require teamwork from the next president and Congress.
“We don't want them wrangling,” she said. “We want them to come up with a game plan where both sides give and take — and implement it.”
Clients also are seeking political moderation, according to Mr. Pressman.
“There's a growing sentiment among the people I talk with [to avoid identifying] with the extremes of either party,” he said. “The majority of Americans are closer to the center than our politicians are.”
Many advisers hope that the election produces divided government, which they say is more conducive to sound policy.
“If I have an inkling of which party is going to control Congress, I will vote for the other side for president,” Mr. Mendels said.