According to the Woodbridge Wealth Survey released two weeks ago, “A majority (83%) of respondents believe that Donald Trump is the best candidate for fostering long-term growth and building a healthy U.S. economy.” In what can only be interpreted as bad news for Hillary Clinton twice as many respondents (12%) believe neither candidate would benefit the U.S. economy than felt Mrs. Clinton would (6%). These are rather stark numbers, but shouldn’t surprise those familiar with the landscape financial advisers work in. These individuals see the ups and downs in the economy first hand, both through the individuals they advise and the investments they monitor. The world of finance is unforgiving. You can’t sweet talk your way out of a bad decision and, quite often, a blunt demeanor can get a job done more effectively and efficiently than the soft ambiguity of diplomatic language.
Despite the apparent clearness of this assessment, we find few – if any – of these financial experts willing to publicly state what was plainly obvious during their days spent in all those finance and accounting classes. The price of honesty this year has been dear. Scott Adams, creator of the Dilbert comic strip and a self-proclaimed “California Liberal,” began writing on the persuasive techniques of Donald Trump last year. Although he seemed to prefer Bernie Sanders, his objective analysis couldn’t help but show Trump, given the political novice’s amazingly successful primary campaign (Trump received a record number of votes and attracted followers from constituencies long thought hostile to Republican candidates). For this honesty, Adams says he has received death threats, appears to have been shadowbanned from popular social media sites, and has lost millions in revenue through cancelled and revoked speaking opportunities.
It’s not unusual, then, for many to avoid the topic of politics this year. When it comes to the DOL’s new Fiduciary Rule, presidential politics cannot be avoided. We now know that both candidates have staked their positions on the matter and, not surprisingly, they come out on familiar opposite sides. Hillary Clinton supports the Rule, Donald Trump, as he has with most regulations, dislikes it. Of interest, though, is that Woodbridge Wealth Survey, where nearly a third of the respondents cite the Fiduciary Rule as the most important potential financial policy reform. How does one reconcile this with the vast support for Trump among financial providers? We sought out members of this community in hopes we could get some of them to go on the record. What we discovered might astonish you.
To begin with, FiduciaryNews.com asked its readers to participate in an informal straw poll regarding the presidential election. Like the Woodbridge Survey, a large majority (66%) preferred Trump. Surprisingly, though, not a single respondent felt the Fiduciary Rule was more important than their presidential pick.
To obtain more clarity on the issue, we asked professionals from across the country as series of more in depth questions. Naturally, they all spoke for themselves as individuals and did not necessarily reflect the opinion of the firms they work for. Our initial question was quite direct:
What’s more important to you, who is elected president or their position on the DOL’s Fiduciary Rule?
Naturally, once we get past the Fiduciary Rule itself, we would expect to see partisan feelings to quickly surface. “I treat putting my clients’ interests first as pillar of my financial planning practice,” says David Rae, a Los Angeles based financial planner with Trilogy Financial Services, who then immediately adds, “I find it hard to see an argument against a rule that would help families make smarter financial decisions for their future. Trump has stated he will repeal the Fiduciary Rule, and that is just one more sign that he doesn’t really care about the average American.”
The other side can be just as compelling, if not more enthusiastic. “The DOL rule will do more damage to investors who really need guidance than honest financial advisors,” says Ilene Davis, a registered rep in Cocoa, Florida. She goes on to say, “Trump, as we know, can be a big of a showman, even crude at times, but I’ve read about Hillary from those who know her. Her language – and treatment of military, secret service, etc… – makes her unfit to live in America much less be President. President Trump!!!!!”
Of course, as with any issue, there are those who maintain a sort of neutrality. Tony Hellenbrand, a Partner with Fox River Capital in Appleton, Wisconsin doesn’t believe either who is elected the next president or their position on the DOL’s Fiduciary Rule is important. He says, “I believe the next president will have far less effect on my clients wealth than their own actions will. Saving money every month, using efficient vehicles that have shown a long term track record of beating inflation, and remaining patient will likely be something like 20-30 times more important than the next president.”
But, what is of most interest to readers may be those individuals who support Trump and support the DOL’s Fiduciary Rule. Jeremy Torgerson, a CEO for a financial services company in Brownsville, Texas, represents many of these people when he says, “Although I support the DOL rule very much, in this election, who wins is much more important to me. As an adviser who focuses my practice on middle to upper-middle income clients, and as a small business owner, I strongly support candidates who seek to restore manufacturing jobs and fair trade deals for Americans. So, I support Donald Trump as the only plausible ‘outsider’ candidate, and the only one who truly ‘gets it’ in terms of the struggles of working Americans.”
We asked Torgerson how he reconciled his policy position with his support for Trump. He said “As a citizen and voter, I am personally for both Donald Trump and the DOL rule. I can support both because a candidate’s platform is his or her ‘Christmas Wish List,’ and I do not see Mr. Trump eliminating the DOL Rule once elected. No politician gets everything they campaigned on. The DOL Fiduciary Rule is ultimately in the best interests of all average working American citizens, as are, in my opinion, the trade and immigration policies of Donald Trump. I don’t see supporting both DOL’s rule and Trump’s candidacy as at-odds when my concern is the general betterment of middle-income Americans.”
Although his presidential preference was in line with his support for the Fiduciary Rule, Rae offered a wise analysis that further explains and justifies why there can be a disconnect between support for the Rule and support for Trump. He says, “Let’s be honest, the Fiduciary Rule is a big issue for most financial advisers, but is not on the radar of the average voter yet. If you look at the big picture of economy, taxes, and who will be better for stock market, who is for or against the Fiduciary Rule isn’t really that big of a factor in who a financial adviser will be voting for.”
We decided to explore this a bit further with our impromptu focus group. Since we had this cross section of America available to us, we thought our readers might be interested to see what they thought of some of the other issues being discussed in the campaign and in particular how they might impact their clients. We first focused on each candidate’s strengths. We asked which asset is more important: Donald Trump’s years of business experience or Hillary Clinton’s years of political experience?.
Again will start with the partisan responses. Rae says, “I think both Trump’s horrible business experience, and Clinton’s years of political experience are important in your decision of whom to vote for. Being President is not an easy job, and if you can’t make money on a casino how can you run a country? Only one of these candidates has the experience and temperament to lead a PTA meeting, let alone to be the most powerful leader in the free world.”
On the flip side, we have the erudite Davis, who says, “I’ve read 7 or 8 of Trump’s books. I’m an Ayn Rand libertarian and devout capitalist. That should pretty much answer why I’d probably vote for the Devil before I voted for Hillary.”
More to the point on the relevance of the contract between business and political experience, Hellenbrand diplomatically says, “On the question of business versus political experience, it’s baffling to me that political experience can be viewed as an asset. Regardless of politics, look at the logic of it. How can I back someone that for decades has operated comfortably inside a system I want radically changed? On the other hand, if you don’t want change, then I understand backing someone with years of beltway experience.”
And then there’s Torgerson, who matter-of-factly says, “Trump’s business experience. Here’s why: if you look at 30 years of both candidate’s professional lives, you can see measurable, tangible results from one and not the other. Trump has created jobs, erected towers and resorts and businesses, and not only participated in, but thrived in the free enterprise system. The same cannot be said for Clinton. In her 30 years, you see grand ambitions, but no results. It’s become clearer and clearer that Clinton used her 30 years to better herself at the expense of others.”
Aware we might have left some stones unturned, we then reversed the question and asked about the candidates weaknesses. Like Chris Wallace, we weren’t afraid to ask about specific warts. We want to know which liability is more important: Allegations from campaign emails and FBI documents suggesting Clinton may have been involved in a “Pay to Play” scheme while serving in the government or allegations that Trump may have behaved decades ago in a manner that is not acceptable today?
Again trying to see things from both perspectives, Hellenbrand says, “My politics aside, look at the polling. It’s pretty obvious that the American people either aren’t paying attention to the emails or the pay to play allegations. You can ignore the polls, too, but money talks. What it’s saying right now is Hillary is going to win. In Vegas right now, you have to bet $500 on Hillary winning the election to win $100. If you’re on the other side, does that mean quit? Of course not. I’ve voted in every national, state, and local election since I was 18, and that’s not going to change because of projections or polling.”
For Torgerson, though, it’s easy for him to weigh the relative importance of each candidate’s Achiilles’ Heel. “By far, Clinton’s activities,” he says. “Trump can be crass, but so is every guy I know when it’s ‘just us guys.’ It has nothing to do with how he’d handle trade negotiations or work with Congress. As a public servant, he’s at worst an unknown element. Clinton however, has served, and she’s demonstrated over and over again an untrustworthiness in that capacity. As Secretary of State, Clinton was tasked with representing the people of the United States. She had a fiduciary and legal requirement to defend and protect the people and the constitution. She sold out both at every opportunity.”
So maybe fiduciary does matter after all, just not in the way we might have initially expected.
[Editors Note: If you know any of these professionals quoted in this article, please go out of your way to thank them for their courage and honesty.]
Are you interested in discovering more about issues confronting 401k fiduciaries? If you buy Mr. Carosa’s book 401(k) Fiduciary Solutions, you’ll have at your fingertips a valuable reference covering the wide spectrum of How-To’s every 401k plan sponsor and service provider wants and needs to know.
Mr. Carosa is available for keynote speaking engagements, especially in venues located in the Northeast, MidAtantic and Midwestern regions of the United States and in the Toronto region of Canada. His new book Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort is available from your favorite bookstore.
The post Retirement Advisers Speak Out on Next President: Trump Trumps Fiduciary Rule appeared first on FiduciaryNews.