American politics is No. 1 'hot topic' with clients: survey

Clients in need of reassurance, according to a survey of financial advisers who custody assets with Charles Schwab

Jun 13, 2017 @ 4:38 pm

By Liz Skinner

Clients are more skittish than usual, and it's the U.S. political environment that has them nervous about whether they are on track financially.

Over the past six months, 84% of advisers said they have needed to reassure clients that they'll meet their investment goals, according to a survey of advisers who custody assets with Charles Schwab. For those advisers, about 18% of their clients required such hand holding over the past six months, the adviser survey released on Tuesday said.

(More: Like Trump? Hate Trump? What happens when politics bubbles up at advisory firms?)

"I was surprised as we went into October and November of last year in the number of conversations clients wanted to engage in on the impact of the political shifts that were going to take place post-election," said Patricia Williams, chief executive of Silicon Private Wealth. "All of a sudden, it seemed to me that people were keenly interested in ideas around hedge strategy and what could change that might impact their portfolios and their ability to meet their goals."

The discussions also have been different than in past periods of uncertainty, Ms. Williams said.

Clients are being proactive and giving some thought as to how shifting political landscapes and policy changes could really impact their investments, she said.

About 68% of advisers described their clients' concern with the U.S. political environment as "a lot" and another 29% said clients are "a little" worried about the political climate.

(More: Financial advisers do whatever it takes to avoid talking politics with clients)

The Washington political scene is, in fact, the leading "hot topic" that clients want to discuss, according to the Schwab survey of 912 advisers who were polled in March and April 2017.

About 34% of advisers said the political environment is what clients most want to discuss, compared to 16% of advisers who said clients want to talk about market volatility or the possibility of a correction, the survey found.

A separate survey taken even more recently found that investors are most concerned with the impact various military and diplomatic conflicts around the world could have on their investments.

About 75% of investors in that survey said they were very or somewhat worried about these geopolitical concerns, while 69% said they were very or somewhat concerned with the U.S. political climate, according to the Wells Fargo/Gallup Investor and Retirement Optimism Index, released on Tuesday. It surveyed 1,005 investors in early May 2017.

(This story has been corrected to indicate that 84% of advisers have needed to reassure clients, rather than 84% of clients have needed reassurance.)


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