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Wirehouses Guide Clients Through Election Scenarios

October 29, 2020

Wirehouses are taking slightly different approaches in preparing clients for the U.S. elections, but most firms agree that clients and advisors should steer clear of massive changes driven by the election's outcome, according to news reports.

UBS found that 64% of investors in the U.S. have thought about revamping their portfolios ahead of the election, while 55% are considering changes after President Donald Trump or former Vice President Joe Biden wins, FA-IQ sister publication FundFire writes.

UBS believes that a blue wave is a likely outcome, and that would give a lift to firms and sectors with exposure to green infrastructure, says Laura Kane, head of thematic investing for the Americas at UBS Global Wealth Management, according to FundFire. If Trump wins, energy, financials, healthcare and defense sectors are poised for a rally, according to Kane, the publication writes.

Nonetheless, UBS is advising clients to steer clear of “sweeping changes” to their portfolios, she says, according to FundFire.

Merrill Lynch, meanwhile, believes that clients should reassess their portfolios with a view to rebalancing and tax implications, Christopher Hyzy, chief investment officer of Merrill Lynch and Bank of America Private Bank, said during a recent Merrill web event, according to the publication.

Merrill and the private bank believe that inflation will continue rising so investors should boost allocations to equities, especially during the possible volatility through the election, according to Hyzy, FundFire writes.

Morgan Stanley Wealth Management, meanwhile, added election scenarios to its portfolio risk platform so advisors can use them to assess clients’ portfolios, says Chris Scott-Hansen, managing director and head of portfolio and trading at Morgan Stanley, according to the publication.

Wells Fargo Investment Institute likewise revamped its model portfolios with a view to the economy, and has moved assets out of investment-grade fixed income into small-cap stocks, according to head of global asset allocation Tracie McMillion, FundFire writes.

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By Alex Padalka
  • To read the FundFire article cited in this story, click here if you have a paid subscription.
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Tags:  Investment strategies , Portfolio management , Bank of America , Merrill Lynch , Morgan Stanley , Wells Fargo , UBS

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