In a speech last week during the Schwab Impact 2010 conference in Boston, Greg Valliere, a CNBC commentator and chief political strategist at the Potomac Research Group, drew a big round of applause from the packed room of advisors when he pleaded rhetorically to President Barack Obama, “Can you please add at least one person with business experience to your Cabinet?”
In an interview on Election Day, Jim Nagengast (left), the newish CEO of independent broker-dealer Securities America, echoed the desire to see not merely business-friendly politicians in power, but those with experience in balancing budgets, in writing business plans, even in hiring and firing people for a business. Nagengast himself caught the political bug four years ago, and while he ultimately didn’t win the general election to the Nebraska Board of Regents, it taught him lessons that he’s using in his new position.
Other than wishing for a little more business acumen among our political leaders, what are the lessons, if any, that advisors and their clients can learn from this midterm election? How will they affect you?
David Tittsworth is the executive director of the Investment Advisers Association (IAA), but before that he spent quality time on Capitol Hill as counsel on several congressional committees. His reading of the election is that the electorate has sent a “pretty definitive statement,” and that “if you’re a fan of gridlock and partisan sniping, you’ll love the next couple of years.”
With the House in Republican hands, and the Senate in Democratic ones, he believes
“Gridlock is the key phrase. Incremental legislation is possible,” Tittsworth (left) admits, but doesn’t expect any major legislation within the next two years. What will occur, he says, will be “divided government at its best,” though he hastens to say that’s “not necessarily the worst thing.”
For advisors specifically, Tittsworth said, “Dodd-Frank will remain intact,” though he says it is possible you’ll see “some work around the edges with the Consumer Financial Protection Agency, on derivatives and on banking, Fed policy, and Freddie Mac and Fannie Mae—“that will be the focus.”
The coming redistricting process in the states, he said, will be a major effect of Republicans taking more governorships, but that shift in power “won’t affect the legislative agenda in Congress.”