Should you let differing political beliefs impact your choice of a financial planner?
Question: I’ve worked with the same financial adviser for about 10 years — and I feel like he’s done a decent job — but in the past few years, his politics have made my wonder about him. I get the impression he’s a MAGA-hat wearing Republican, and I’m pretty liberal. I can’t help but feel that my investments that he manages might be supporting causes I don’t want to support, and that his life values don’t really match my own. How much does this really matter though? Do I need a different adviser? (You can use this tool to get matched with a financial adviser who might meet you needs.)
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Answer: It sounds like there are two issues at hand here — one is your bar or specific criteria for evaluating the work your adviser has done for you and the other is even more fundamental, which is if your adviser’s values are a match for your own and how much that matters. Here’s how to tackle both.
How much do values and political beliefs matter in a financial adviser?
As for political differences and his personal values, pros say they don’t have to be a dealbreaker but you shouldn’t ignore your feelings either. Wealth adviser Bruce Tyson says investment counseling can often be a two-pronged responsibility — you handle a client’s investments and also give non-investment financial advice, like teaching one’s kids about money, charitable giving and about the place of money in building a flourishing life. “To take and absorb such advice, a client would ideally have trust in the adviser beyond the adviser’s money-making abilities. In that regard, there should be a degree of simpatico in the relationship,” says Tyson. So you’ll need to ask yourself: Despite apparent political or personal value differences, do you trust your adviser and know he’ll help give you financial advice that aligns with your goals and values?
And indeed, politics isn’t totally divorced from investment management. Certified financial planner Steve Stanganelli says that while he tries not to talk politics with clients, “I do have to note politics in so much as it impacts possible tax, fiscal or monetary policy,” says Stanganelli.
Ultimately, if you’re feeling uncomfortable given your adviser’s politics or apparent values and feel they impact his or her decision making, you should feel free to leave as you would in any other relationship. “All relationships have boundaries and money is as much, if not more, about the relationship as it is the technical expertise,” says Stanganelli. (You can use this tool to get matched with a financial adviser who might meet you needs.)
As for her investing in things that support causes you’re not keen on, go ahead and ask about that. She should be able to explain every investment she makes for you. You also might want to look into what the investment firm supports: Some advisers post on their websites or public relations materials that they support certain community activities or charities, giving prospective clients the information necessary to make an informed decision to continue or sever a business relationship.
How to evaluate your adviser, regardless of their political beliefs
First up, take a hard look look at your goals, and whether your portfolio is helping you meet them, says Andy Rosen, investing spokesperson at Nerdwallet. “If your retirement savings are not meeting your goals, you can ask your adviser why that is and how you can address it,” says Rosen.
Still not sure? “When you say your adviser has done a decent job, this raises the question, ‘based on what?’,” says certified financial planner Lisa Weil. You should be basing this on real markers, not just instinct: “Does your adviser provide you with a benchmark to compare the results of his work with you?” she says. Benchmarks can vary widely. It might be comparing how, say, your U.S. stocks performed against the S&P 500, or depending on your holdings, comparing them to something like Vanguard’s Growth Index Fund, Vanguard’s Information Technology Index, or Vanguard’s Total World Stock Index Fund. That said, “every portfolio has its own unique mix of holdings, which means comparisons can be difficult, particularly since each and every portfolio’s performance will differ, depending not only on the mix of assets held, but also the timing of when you got in and when you get out of individual positions,” she says. (You can use this tool to get matched with a financial adviser who might meet you needs.)
Bottom line: If you want to, “you have the choice to vote with your feet and find an adviser or firm that’s more aligned with your values,” says Stanganelli.
Questions edited for brevity and clarity