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Main Street’s financial advisers confident in Romney, but not in victory
The people who manage money, Main Street's financial advisers, are overwhelmingly voting for Mitt Romney in this year's election — but are far less certain he will win, according to an online poll by the Financial Services Institute.
The advisers are increasingly gloomy about the U.S. economy — just 16 percent say they expect it to recover this year — and are bracing for higher capital-gains taxes in the future, with a whopping 95 percent of them saying they think those tax rates are headed up.
Mr. Romney easily topped President Obama as the advisers' choice for the White House, by 81 percent to 15 percent.
"There has to be a change," said Kelly Campbell, president of Campbell Wealth Management in Alexandria. "I'm a registered Republican but I'm not saying I'm necessarily voting for a Republican, I'm voting for change."
But the advisers were far less likely to believe Mr. Romney will actually win. Just 53 percent said the presumptive Republican nominee will unseat Mr. Obama, while 47 percent said the president will ride to re-election.
In contrast, 70 percent said they think the Senate, currently controlled by Democrats, will flip to Republicans in the election.
FSI emailed a questionnaire to its 35,000 members in a self-selecting, nonscientific poll, and 2,376 took the poll, which was open Aug. 8-10 — before last weekend's announcement that Rep. Paul Ryan would be the Republican vice-presidential nominee.
Dean Harman, who runs Harman Wealth Management Inc. LLC in The Woodlands, Texas, said selecting Mr. Ryan was reassuring evidence Mr. Romney is approaching the White House as a CEO would.
"I think this focuses the election right there on the budget and the economy, which is really what our No. 1 priority is," Mr. Harman stated, though he said he is not sure those messages trickle down to average voters. "I don't know those issues sway the middle as much, I don't know the middle sometimes understands that, but it puts focus where it should be."
The financial advisers said in many ways their views reflect those of their clients, who are the kinds of successful business owners and professionals who pump money into the economy. Mr. Harman said part of that view is that more government stimulus — while popular among many economists — is not viewed as a long-term growth plan by much of Main Street.
Overall, the FSI poll showed the advisers are less confident that the U.S. economy will recover. In February, 38 percent said they expected a recovery this year, but that has slipped to just 16 percent.
The poll's capital-gains finding was particularly striking.
Mr. Campbell said most financial advisers believe they've been living on borrowed time with the 15 percent tax rate on capital gains — which was part of the 2003 tax cuts President Bush signed.
The rate had been 28 percent in the 1990s, was cut to 20 percent in 1997, then reduced an additional 5 percentage points in the 2003 law.
"People believe that the 15 percent capital-gains tax was a gift, and it's been something we've been very lucky to have," Mr. Campbell said. "It kept getting extended, but it's probably too low. That doesn't mean it should go to 25 or 30 percent — there's probably a happy medium."
Mr. Harman said advisers may disagree with raising the rate, but that there's a sense of inevitability that revenue needs to go up, and that lawmakers are more likely to hold the line on income-tax rates rather than capital-gains rates.
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