Financial advisors have historically leaned to the right on the political spectrum, and this presidential election cycle is no different — at least in the number of donations to Donald Trump's campaign.
WealthManagement.com recently analyzed Federal Election Commission data showing contributions from individuals who listed “financial advisor” as their occupation and found that Trump's campaign received 2,012 donations so far this year, compared to 1,381 for Vice President Kamala's campaign Harris. (This includes contributions to President Joe Biden's campaign before he withdrew his candidacy.)
Still, Harris donors generally cut larger checks. The total dollar amount received by the Democratic campaign was $400,980 compared to $302,987 for Trump.
“This is consistent with what we're seeing nationally, that Harris has done a better job raising money,” said Jeff Bush, director of The Washington Update and a frequent consultant to financial services firms on politics and policy. of Washington. “There's a lot of passion for some of the issues that Kamala Harris is running on, and I think that can be reflected in the dollar amounts.”
Political contributions are handled under the Securities and Exchange Commission's Pay-to-Play Rule, part of the Investment Advisers Act of 1940, which prohibits an investment adviser from collecting fees from a government entity if the adviser makes political contributions of more than $350 per a candidate they are entitled to vote for or $150 for others. Advisors may not receive compensation from the relevant government entity for two years after making a contribution.
Looking at financial advisors who indicated they were “self-employed,” Trump received 544 contributions, compared to 399 for Harris.
Advisers in the four offices accounted for 250 of Trump's donations and 235 for Harris.
To be sure, the data does not capture every advisor in the industry, including those who may have used job titles other than “financial advisor.” The data also includes multiple donations from the same individuals, showing how well both parties have built auto-renewals.
We hear it often counselors should be agnostic about their political beliefs when working with clients. But Bush believes there is room for advisers to express some political convictions.
“You can't expect an adviser not to have a personal opinion on the political landscape,” Bush said. “How this is reflected in their profession is really unique to the individual. As I travel around and work with councilors across the country, I have councilors who are very open about their politics and councilors who won't touch it with a 10-foot pole. So I think there's room for expressing one's political interests if that's how you choose to build your business.”
Many advisers donated to industry super PACs, though not to the same extent as presidential campaigns. For example, 136 advisors contributed to the Financial Services Institute PAC, totaling nearly $52,000. The National Association of Insurance and Financial Advisors saw 713 contributions from advisors, totaling nearly $78,000. The Association of Investment Advisers and the Securities Industry and Financial Markets Association did not receive any individual contributions from advisers.
“I'm glad to hear that advisers are participating,” Bush said. “I tend to believe that when advisers donate personally, they are donating more to what they believe should be the right direction of the country,” Bush said. “This is social; this is foreign policy; these are all other matters.”
“We must always be an engaged electorate. And one of the biggest concerns I have in our country is that we have abdicated that responsibility,” he said.