Weekend Essay: Should Advisors Talk Politics With Their Clients?

I recently wrote a story about a St James’s Place employee mocking a customer’s political views in a private message on a social media platform.

After looking at the comments section, a recurring criticism was that the piece was confusing.

With hindsight, it is true that I could have better explained the interaction between LinkedIn and Twitter.

While the client complained about the behavior of this employee on Twitter, where his political position was explicit, the private message was sent on LinkedIn. I guess this person’s LinkedIn profile was more neutral, as this social media platform is rather “corporate” and, frankly, bland.

More importantly, the comments section quickly descended into a political debate among our readers, leading me to wonder if advisors should engage in political discussions with their clients?

After all, everyone has a political opinion, since it is very easy to form one. Unlike a pension plan or a mutual fund, there is no real metric to measure the performance of a political position.

Even if an ideology has failed in the past, you can still argue that it was not properly applied and should be revived. Such debates cannot have a definitive answer since they attempt to demonstrate things that did not happen.

As such, the policy is very subjective. It’s more about personal beliefs, values ​​and feelings than measurable results.

In addition, there are a number of polarizing issues in the UK, with Brexit and the new Prime Minister being the most topical.

But if there’s anything I’ve noticed in three years in the UK, it’s the tribal hatred among supporters of different parties, especially between Labor and Conservative voters.

In short, there are many reasons for normal conversation to veer into politics.

I guess as an outsider I have the luxury of being able to afford to ignore all these issues of cleavage. I came to the UK to learn a trade and gain valuable professional experience, not to voice (and dare I say form) opinions about local politics and society (who cares anyway?).

I suspect that clients might, deliberately or not, engage in a political discussion with their adviser from time to time.

There is no obvious connection between financial planning and politics, but sometimes the two worlds collide.

Mark Pittaccio, business consultant and behavioral economist at Quilter Financial Planning, says: “Politics can be a natural area of ​​conversation to wander into or just comment on when talking about financial affairs.

“Political views can be inadvertently inferred when discussing tax rates or the cost of living.”

I think it’s legitimate for customers to want to know how an event or political decision might impact their finances.

Other times, they were just going on a political rant, which isn’t so surprising after all. As you build a relationship, even a business one, you will feel more comfortable opening up to your interviewer.

At this stage, there are two possible approaches.

You can either ignore.

Lamb Financial director David Lamb says: “Politics is very personal. We need customers to trust and love us. Getting into political discussions can ruin the relationship with a client.

“It’s extremely rare for a client to have such strong political views that we clash. If I were in that position, I would probably consider that I don’t want that client in my life.

“At the end of the day though, when it comes to politics and customers, I would aim to be very bland.”

Or you can share your own views.

West Riding Personal Financial Solutions managing director Neil Liversidge said: “If you’re a political person – and I am – then I think it’s important to be honest with customers about where you stand on the great problems if the subject arises.

“Four years ago, a new client dropped in conversation his opinion that ‘Brexit was the worst thing ever’.

“I just said, ‘We’ll have to agree to disagree on this – I voted ‘Leave’ and told him why.”

At the end of the day, and especially if you own your business, there is no right or wrong reaction, as long as you don’t beat your customer if they have different opinions from yours.

Personally, I don’t know how I would react. In a sense, it’s a choice between your free speech and your commercial interests. In an ideal world, you could have both, but you’ll probably have already noticed that we’re not in an ideal world.

It just depends on what matters most to you.

Pittaccio says, “Ultimately, many advisers run their own business and decide who they will or will not advise, and a client’s political leanings can affect that decision.

“To determine if you can bring value to a client, you have to know if you can work with them for the long term and if a client’s policy has an impact on that, it’s not fair to the client. or to advise him to continue this relationship.”

Obviously there are risks involved in revealing your political stance and as a financial adviser one specific risk is losing clients.

Managing Director of Philip J Milton & Company, Philip Milton, said: “I took the bull by the horns in 2010 and ran for Parliament, so the profile was high, should I say, on the political front.

“I was not embarrassed to represent the party that I was doing. Indeed, for me it was the opportunity to represent my community and to give back something that animated me.

“In our letters, we have tried to take a neutral line naturally, but I am ready to criticize anyone who does what I consider madness (government or regulator), regardless of their political color.

“However, it has been noted that there are some really mean SM people who attack anyone who doesn’t share their views.

“Maybe some of them, or the people they influence, may have been customers otherwise, but likewise some people will be customers because they can share our views.”

For the record, Milton informed me at the end of our correspondence that I had the right to vote in local elections. The next morning, I found by chance a registration form for the next borough elections in my mailbox.

While advisers have until now had a choice of fight or flight when customers enter into political conversations, the new Consumer Duty could make it harder to handle those situations.

Pittaccio says, “With Consumer Duty, a key driver of trust is having an open and honest relationship with a customer and having relatively open discussions can lead to professional intimacy in that customers can be comfortable with how they expect information to be treated.

“Intimacy, coupled with credibility and reliability, will help build trust and ensure the client unlocks the value of the advice.

“It is therefore a sensitive subject but an adviser will naturally have to deal with it on a regular basis and using soft skills to manage the conversation carefully will be of the utmost importance.”

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