Almost half of advisors worry about contested presidential election

As the U.S. presidential election approaches, many financial advisors are already dreading one possible outcome: not that their preferred candidate will lose, but that the results will be contested.

Forty-five percent of wealth managers say a disputed election would have a negative effect on their business, according to a new survey by Arizent, Financial Planning's parent company.

The survey questioned 1,227 business leaders and professionals across the country, including 164 in wealth management. It also provided some key context to its findings: 87% of wealth managers are dissatisfied with the current political climate, including 70% who are "very dissatisfied."

Since 2024 began, the presidential campaign has been a common concern for financial advisors, many of whom say their clients grow more anxious about the economy as the election approaches. 

"Election years often bring out a client's worst enemies: fear and emotion," said Austin Marrs, co-founder of TSA Wealth Management in Houston, Texas. "We are constantly told if our candidate or party does not win, then the economy, the country and even the world is doomed."

And considering the aftermath of the last presidential election, it's hard to ignore the possibility of another constitutional crisis. After Joe Biden won the presidency in 2020, outgoing president Donald Trump repeatedly claimed the contest had been "rigged" and resisted the transfer of power.

The evidence did not support his claims. Multiple studies and investigations have reaffirmed that President Biden legitimately won the election, and reviews of the vote by that year's swing states not only confirmed his victory, but — as was the case in Arizona — sometimes expanded his lead. Trump and his lawyers never provided proof of widespread voter fraud, and they repeatedly failed to overturn the results in court.

Nevertheless, the defeated Republican continued to tell his supporters otherwise. And on Jan. 6, 2021, his efforts reached a catastrophic climax: After a rally in Washington, D.C., where Trump told his audience to "walk down to the Capitol," a mob of his supporters stormed Congress as it was certifying the election results.

The specter of that crisis still haunts many Americans, including financial planners, as November 2024 approaches. But some advisors say it's no use worrying what will happen after this year's ballots are cast — and in any case, it shouldn't affect clients' portfolios.

"I believe speculating on a disputed election is unwise and unhelpful," Marrs said. "In the event that it does happen, my advice to clients would not change. We are long-term investors and will not change our plan based on a temporary political event."

The biggest challenge of such a crisis, some planners say, would be calming down nervous clients and convincing them to stay the course. 

"Lots of talking heads tell you to do this or do that, providing a false sense of control," said Stephen Bodwell, founder of Walnut Hill Wealth Management in Dallas. "Often the best course of action is inaction, assuming you have a well-designed, diversified portfolio. But many investors don't want to hear that — they want to take action, and there will be plenty of folks out there willing to give action advice."

READ MORE: Retirement confidence falters as election 'ugliness' approaches

In any case, wealth managers have other political priorities. Arizent surveyed advisors about 23 different policy areas, asking which of them was the "most urgent for the next administration and Congress to address." 

Predictably, the most popular answer — chosen by 50% of planners — was the economy. A close second was the national debt with 48%, followed by tax reform with 43% and industry regulation with 39%.

As for a disputed election, almost half of the surveyed advisors believe this would negatively affect their firm's "ability to advance key business goals." But among the other half, many see it as just one of the many ups and downs of the American economy — something they can talk their clients through if and when it happens.

"One of the biggest value-adds I provide to my clients is related to the psychology of money — talking clients off the proverbial cliff, saving them from themselves," Bodwell said.