Independent financial advisors overwhelmingly voted for Donald J. Trump and want the incoming administration to abolish the Department of Labor’s fiduciary rule, according to a Washington broker-dealer trade group.
The online survey of 1,357 advisors by Financial Services Institute, conducted a week after the Nov. 8 election, found that 71 percent of respondents voted for Trump and 19 percent for Hilary Clinton. The rest voted for a third-party candidate, wrote in a candidate or declined to answer.
An overwhelming majority – 86 percent – said the new president should torpedo the DOL fiduciary rule, the survey found.
“The call to repeal the DOL fiduciary rule as soon as possible is driven by their clients’ need to access their help in securing a dignified retirement,” said Dale Brown, president and CEO of FSI, in a news release.
Opponents of the DOL rule said it would force thousands of Main Street advisors out of the business and leave many middle-class Americans without affordable retirement advice.
Broker-dealers who earn a living off commissions also stand to lose hundreds of millions of dollars in fees and billions of dollars in assets as the rule encourages the shift to fee-based accounts.
The rule is slated to begin taking effect in April.
The FSI survey revealed that 21 percent of respondents planned to retire or sell their practices in the next one to five years. Of those advisors retiring, 12 percent said the DOL rule was their primary reason for leaving the industry.
Advisors backing Trump, a Republican who has promised to cut taxes and streamline regulation, comes as no surprise and are consistent with findings from FSI’s previous presidential election survey, said Chris Paulitz, senior vice president of membership and marketing for FSI.
FSI represents independent broker-dealers.
In August 2012, shortly before President Obama won a second term, an FSI membership survey found that 81 percent of respondents favored Mitt Romney.
Advisors Optimistic About 2017
Financial advisors revealed themselves optimistic about the economic prospects for next year: 58 percent said the economy in 2017 would be “strong” and 36 percent said next year would be “neutral.” Only 6 percent predicted a weak economy.
In addition, 56 percent see 2017 as a strong year for equities, and 37 percent rated 2017 as neutral for stocks. Only 7 percent said 2017 would turn out to be weak for stocks.
The Standard & Poor’s 500 index is up 7.58 percent year to date. In November, it rose 4.81 percent.
A falling unemployment rate over the last few quarters and the upward revision of third-quarter economic data seem to point to a better year ahead.
While Trump and his transition team have called for cutting taxes, 49 percent of advisors said the new administration should also cut spending, the survey found. Only 3 percent of advisors surveyed said Trump should raise taxes.
Another sign that financial advisors appear bullish on 2017 comes from the percentage of advisors who intend to buy and sell a practice in the future.
Buying a practice is a signal that advisors are planning to remain in the market, while selling a practice points to an exit.
The survey found that 34 percent of respondents planned to buy another practice over the next one to five years, an increase of 5 percent compared with 2014.
Reasons to buy include the need for achieve more scale to remain profitable and to take advantage of future opportunities in the industry to expand services.
“They are looking to buy and stay in the industry instead of exiting, so that’s a good sign,” Paulitz said. ”You can clearly see hope in the future with this poll.”
The 21 percent of advisors planning to retire or sell their business over the next one to five years represents a 6 percent rise from 2014, the survey found. Most respondents – 67 percent – said they wanted to sell so that they could retire.
The survey found that 51 percent of respondents had a business succession plan finalized and in place, an increase of 10 percent from July 2014.
“That’s a nice surprise and it’s a good one,” said Paulitz.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected]
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