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 Harris’ campaign. (This includes contributions to President Joe Biden’s campaign before he withdrew his candidacy.)
Yet Harris’ donors overall cut larger checks. The total dollar amount received by the Democratic campaign was $400,980 compared to $302,987 for Trump.
“That matches what we’re seeing nationally, that Harris has done a better job raising money,” said Jeff Bush, principal of The Washington Update and a frequent consultant to financial services firms on Washington politics and policy. “There’s a great passion for some of the issues that Kamala Harris is running on, and I think that could be reflected in the dollar amounts.”
Political contributions are addressed under the Securities and Exchange Commission’s Pay-to-Play Rule, part of the Investment Advisers Act of 1940, which prohibits an investment advisor from collecting fees from a government entity if the advisor makes political contributions over $350 to a candidate they are eligible to vote for or $150 to others. Advisors can’t take compensation from the relevant government entity for two years after a contribution is made.
Looking at financial advisors who indicated they were “self-employed,” Trump received 544 contributions, versus 399 for Harris.
Advisors at the four wirehouses 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, indicating how well both parties have built in automatic renewals.
We often hear that advisors should be agnostic about their political beliefs when working with clients. But Bush believes there’s room for advisors to express some political convictions.
“You can’t expect an advisor not to have a personal opinion on the political landscape,” Bush said. “How that’s reflected in their profession is really unique to the individual. As I travel around and I work with advisors all over the country, I have advisors who are very open about their politics, and advisors 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 advisors donated to industry super PACs, although not to the same degree as the presidential campaigns. For instance, 136 advisors contributed to the Financial Services Institute PAC, totaling nearly $52,000. The National Association of Insurance & Financial Advisors saw 713 contributions from advisors, totaling nearly $78,000. The Investment Adviser Association and Securities Industry and Financial Markets Association received no individual contributions from advisors.
“I’m glad to hear that advisors are participating,” said Bush. “I tend to believe that when advisors are donating personally, they’re donating more on what they believe the right direction of the country ought to be,” Bush said. “That’s social; that’s foreign policy; that’s all those other issues.”
“We’re always meant to be an engaged electorate. And one of the biggest concerns I have in our country is we’ve given up on that responsibility,” he said.
