How to politics-proof client portfolios in a hyperpartisan era

When it comes to the markets, investors have always been influenced by their political views. But since January's administration change, I've witnessed more intense politically motivated investing than I've seen in my 30 years in the industry. 

One of my progressive clients demanded liquidation of substantial equity positions, citing partisan concerns rather than financial goals. And a conservative client — a physician — reacted to a first-quarter market correction by saying, "The deep state is punishing us."

As far apart as these clients are on the political spectrum, they share one thing in common: a willingness to abandon years of careful financial planning based solely on partisan political emotion.

They are not alone. In my experience — and in conversations with other advisors — it seems more clients than ever are allowing politics to influence their financial instincts. Research confirms the underlying behavior. Earlier this year, Vanguard noted that political bias frequently drives investor decisions, even though long-term data shows markets have performed well under both parties.

As midterm elections approach and policy debates intensify, advisors need frameworks to help clients maintain financial discipline amid political turbulence. Here are three filters I rely on to keep clients focused on their long-term financial goals.

Immediate risk vs. transient noise

Not every headline demands action. When the 2025 House budget proposal sought to significantly roll back clean energy tax credits expanded under the 2022 Inflation Reduction Act, several energy-sector clients reacted with concern. Concerned about potential regulatory impacts, their instinct was to reallocate portfolios based on anticipated winners and losers. Instead, we pushed pause to look at what was behind the headlines, evaluating the proposal's provisions, historical precedent and implementation timeline. After this examination, most clients maintained diversified positions, avoiding unnecessary transactions when the final bill looked dramatically different from initial proposals. 

This approach works even with the most politically agitated clients because it shifts focus from partisan rhetoric to specific policy details.

Conversation starter: "Let's separate what's making headlines from what might actually impact your financial plan. What specific provision concerns you, and how would it directly affect your goals?"

READ MORE: Proactive comms can keep jittery clients from blowing up inboxes during market turns

Political cycles vs. financial goals

Short-term political stress should not derail decades of financial discipline. To help bring perspective, ask clients to zoom out.

During this spring's market volatility, driven in part by new tariffs introduced by the current administration, a client who is nearing retirement grew anxious. Would prolonged trade tensions cause their portfolio to drop, impacting future retirement income? 

Together we reviewed their financial plan, demonstrating that their income needs were secured through fixed-income allocations for the next five years — more than enough time to weather political uncertainty, based on historical market recovery patterns.

Conversation starter: "Your retirement plan spans decades. This administration spans a few years. How can we structure your portfolio to withstand multiple administrations, not just the current one?"

Values vs. reactions

Clients often want their investments to reflect their values, such as environmental sustainability or strong corporate governance — and those priorities can form a valid basis for a long-term financial strategy. But moments of political or regulatory uncertainty can lead some investors to react emotionally or impulsively, making decisions based on fear rather than their core values.

For example, one client who is passionate about environmental issues wanted to divest quickly and completely from all energy companies after the EPA in March announced plans to roll back emissions standards for power plants, a move the client viewed as a major setback for environmental progress. But rather than exiting the sector, we explored ESG options that maintained sector exposure while emphasizing environmental leaders — honoring the client's values without sacrificing diversification.

Conversation starter: "There's a difference between aligning your portfolio with your values and reacting emotionally to headlines that challenge those values. The first is a long-term strategy; the second is a short-sighted reaction that can undermine it. Let's look at your core values, not just your current emotions. What investment approach would truly reflect those convictions?"

The advisor's evolving role

In politically charged times, the value financial advisors provide isn't just technical expertise — it's perspective. History shows markets have performed under both Republican and Democratic administrations. Since 1945, the S&P 500 has averaged annual returns of approximately 11% during Democratic presidencies and 10% during Republican ones, despite passionate beliefs on both sides.

Our role is not to echo our clients' political views, but to anchor them in purpose, not politics. That's how we help them build resilient wealth — no matter who's in the White House.