For financial advisers, the 2012 presidential race offers many important lessons. First, always be honest and direct with your clients.
Let's face it — both President Barack Obama and former Massachusetts Gov. Mitt Romney did their fair share of truth stretching during the campaign. But nobody, and I mean nobody, likes to be lied to.
If clients can't handle the truth — even if that truth involves telling them that they have to work a few more years because they didn't save enough for retirement — then best not to work with them in the first place.
Second, define your principles before somebody defines them for you.
Mr. Romney did a pretty good job of brandishing Mr. Obama as an example of a poor leader with bad economic policies and low standards for success. Likewise, Mr. Obama successfully depicted Mr. Romney as an out-of-touch rich guy who abhors the middle class and favors an extreme policy agenda.
Right or wrong, both characterizations dogged the candidates throughout the campaign.
And last but certainly not least, do not ignore America's changing demographics.
The main reason that Mr. Romney lost to Mr. Obama is that he garnered just 27% of the Hispanic vote. Mr. Obama, on the other hand, snagged 71%.
That 44-percentage-point spread, which can be attributed to the candidates' vastly different views on immigration reform, translated into defeat for Mr. Romney and victory for Mr. Obama.
A record 23.7 million Hispanics were eligible to vote last week, according to an analysis of Census Bureau data by the Pew Hispanic Center. That figure, representing 11% of the electorate, was up dramatically from 2008, when 19.7 million Hispanics were eligible to cast ballots, accounting for 9.5% of the voting public.
If I hear another person say that Mr. Romney lost the election because he wasn't “conservative enough,” I am going to scream. He lost because he didn't see the future coming — even when it was staring him right in the face.
Bob Dylan wrote, “The times, they are a-changin'” — and advisers, like the Republican Party, need to start a-changin' with them.
The first step is to look around at your own practice. Go ahead, take a walk around the office.
How many of your client-facing professionals are minorities? Not enough, I bet.
Although African-Americans represent about 13.1% of the U.S. population, they represent just 5.2% of all advisers, according to the Census Bureau. Hispanics, at 16.7% of the population, represent just 3.5% of advisers, and Asian-Americans, at 5% of the population, account for just 4.9% of advisers.
The shortage of minority advisers makes it more difficult to attract minority clients.
Of course, it isn't enough to go out and just hire a bunch of minority advisers. You have to create a culture that encourages them to be successful. That takes training, coaching and time.
Is it worth the effort? You bet it is.
Consider this: Asian-American, Hispanic, black or mixed-race births accounted for a majority of U.S. births (50.5%) in the 12-month period ended July 31, 2011, according to a recent Census Bureau report.
Today there are more than 311 million people in the United States, 120 million of whom are minorities.
At the current rate of growth, minorities will account for more than half of the U.S. population by 2050, according to estimates.
There is, of course, one other lesson to be learned from this year's presidential race: Never threaten to fire Big Bird on national television.
Frederick P. Gabriel Jr. is the editor of InvestmentNews. Twitter: @fredpgabriel