From the November 2012 issue of Research Magazine • Subscribe!

October 24, 2012

Should Advisors Run for Office?

The financial advice business offers valuable preparation for politics.

As this election season careens to a close, financial advisors will be watching the outcomes of the various federal, state and local races closely. 

Rarely, however, have advisors made the leap to becoming candidates themselves, let alone gotten elected.

In the current 112th Congress, financial advisory experience is limited. Sen. Barbara Boxer (D-Calif.) was a stockbroker in the early 1960s, before becoming in successive order a journalist, congressional aide and elected politician. Sen. Dean Heller (R-Nev.) was an institutional stockbroker and broker-trader at the Pacific Stock Exchange before entering politics; he is not running for re-election.*

The picture changes only modestly if one includes accountants, of which there are seven in the House and two in the Senate. By comparison, according to an August 2012 report by the Congressional Research Service, Congress has 200 lawyers, 81 educators, 17 farmers, five ordained ministers, two pro football players and one astronaut.

  Financial Planning Association head Paul Auslander recently argued advisors should get more interested in public office. Why, though, has the interest been so modest to begin with?

One can speculate, quite plausibly, that the key reasons include: (1) Advisors are too busy to undertake that level of political involvement. (2) Advisors earn incomes far higher in their current jobs than they would from any political office. (3) Advisors see anti-Wall Street public sentiment as a formidable hurdle to their ability to win elections.

Yet certain other factors merit consideration as well—and might point some advisors toward a different conclusion.

To begin with, advisors are a logical talent pool to draw on for helping shape public policy on economic and financial issues—a particularly important qualification at a time when such issues loom large and pessimism is growing about the prospects for future prosperity. Advisors bring the unusual perspective of being close observers of both broad economic and financial trends and their concrete ramifications at a personal level.

Furthermore, the advisory business requires and fosters communication and marketing skills that could be quite valuable to a politician—both for getting elected and for functioning effectively in office. Advisors tend to be outgoing people with large networks of contacts (potential supporters, volunteers and contributors) and sound negotiating skills for when disagreements and problems arise.

The decline of the Occupy Wall Street movement suggests that there are limits to the political traction gained by hostility to the financial sector. Moreover, the public image of that sector is not uniform. Advisors as a group seem to enjoy a more positive public perception than, say, hedge fund managers or investment bankers. 

While polls in recent years have indicated much public disenchantment with financial institutions, many clients have expressed satisfaction with their own advisors. And some advisors have made it a successful selling point to contrast their practices with “Wall Street.” Being an advisor could well be a plus on the campaign trail.

Of course, none of the above is to say that you—a financial advisor reading this article—ought to run for office. There may be any number of specific reasons why this would not be a desirable and suitable path for you. Then again, it just might be.

 

* Correction 11/5/12: Sen. Heller is indeed running for re-election.

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