When talking politics with clients, UBS financial advisor Jason Katz says he stays neutral and tries to steer the conversation back to portfolio implications.
“I have clients who are down the middle and some who lean very far right and lean very far left,” says Katz, who reports almost $3 billion in client assets.
“I play it down the middle,” adds Katz, who is the managing director of Katz Wealth Management, part of the UBS network.
Clients “feel the need, or that they have license, to share their views,” he says.
In response, Katz reminds clients that his investment advice has “nothing to do” with his own political views and only reflects his role as a “market observer.”
A recent UBS investor survey shows that 72% of respondents are considering a shift in their holdings before the November 3 presidential election and 62% plan to make additional changes based on the results. UBS surveyed 2,852 investors and 1,150 business owners from September 22 to October 12.
Instead of debating about the elections, advisors should explain the consequences for investment portfolios based on different election outcomes, according to Katz and Jason Draho, head of asset allocation at UBS Americas and part of the Chief Investment Office unit.
The CIO unit issues bulletins for clients about the “possible implications for different asset classes” of various election scenarios, Draho says. Those include projections for a Joe Biden or Donald Trump win as well as the consequences for either party capturing House and Senate majorities, he says.
The CIO team tries to play out how a likely scenario — such as a blue wave scenario of Democrats winning the White House and possibly even the Senate and House — will impact sectors and regulatory, tax and trade policies, Draho says.
“The nuance is very helpful,” Katz says about the CIO’s dispatches. “Sometimes it’s to help clients psychologically to have exposure in areas preemptively.”
“Even if it doesn’t unfold the way we thought it would, the fact that we gave it thought and consideration and made some moves to prepare for it gives clients peace of mind,” Katz says. “And they know that the firm is forward-thinking in [its] research and that the advisors are taking advantage and leveraging that.”
In instances when political preferences of clients prevent them from following Katz’s advice, he says he documents their refusal in client folders.
“Maybe out of 50 conversations, one person is so passionate about their views that I’ll have to make a note that they didn’t take our counsel,” Katz says.
More than half, or 57%, of 872 investors surveyed in August by Hartford Funds believe it is important that their financial professional’s political views are aligned with their own. Around 44% of the respondents said they would consider switching financial professionals if their political views do not align. The respondents had at least $100,000 in investable assets.
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