How Will Obama’s Reelection Impact Advisors?

A Wealth Management  poll showed that 70 percent of financial advisors believed that a Mitt Romney presidency would have resulted in better business. This is due to the fact that most investors and financial advisor Vancouver see the propagation of the Obama administration’s policies of higher taxes, tighter financial regulations, and increasing the amount of national debt as a bad thing. And for the investor, all of these policies are a bad thing.

Ultimately, for the financial advisor Vacouver, another term for President Obama presents a small handful of challenges. But the size of each of these obstacles is so massive that it has many financial advisors and their clients hesitant and uncertain as to how to react to what lies ahead.

• Fiscal Cliff—The first and most pressing challenge that financial advisors face is the “fiscal cliff.” Even though lawmakers would have had to face this situation regardless of the outcome of the election, a Romeny presidency would have almost certainly have resulted in an deal that a business owner would have benefited from—lower taxes, spending cuts, and a reduction of the deficit. But with Obama still holding the reins, the outcome of the fiscal cliff is far less clear. Neither the President nor the members of his party are showing a willingness to negotiate demanding increased revenue from higher taxes on the Americans within the upper-income bracket. Needless to say, higher taxes for a financial advisor can be crippling.
• Dodd Frank Wall Street Reform and Consumer Protection Act—The implementation of this act is almost certain to result in a headache for the financial advisor. The Dodd Frank Act will impose even stricter mandates on the brokerage industry. All financial advisors and brokers will be obligated to abide by a uniform fiduciary standard. What does that mean in layman’s terms? Well, your broker is going to have to be more specific about exactly how they are getting paid. They will have to be even more conscious of possible conflicts of interest as well in order to avoid any kind of government scrutiny.
• Volcker Rule—Perhaps the most inhibiting of the regulations being imposed on brokers is the Volcker Rule. This policy will require financial investment service institutions to stick to safer investment strategies like Treasuries. An investment services’ ability to make “speculative” investments that would probably not do their client any good will be greatly restricted as a result of this rule. Since the whole prospect of investing has been formulated around speculation, the absurdity of this policy to both the financial broker and his or her client is evident.

The uncertain economic climate that a second Obama term entails will certainly negatively affect the markets and the investors and consumers as a result. But for the broker, another four years with Obama could prove to be very taxing—no pun intended.