How advisors, RIA execs and finance experts are reacting to 2024’s election results
By Alec Rich, Lilly Riddle, CityWire, November 6, 2024
With former President Trump now projected to return to the White House, advisors across the industry are weighing in on what it means for advisor-client relationships, regulations and more.
As the dust settles in Washington, D.C., the RIA industry is bracing for how Election Day results will touch on everything from market volatility to tax laws to regulation.
Former president Donald Trump is projected to win back the White House and Republicans are expected to control the Senate, while control of the House of Representatives remains uncalled, according to the Associated Press. But ahead of the full slate of results, Citywire spoke to a range of advisors, firm partners and experts from across the industry — and country — to see how they’ve discussed potential outcomes with their clients over the last few weeks and what might lie ahead for RIAs.
One consensus among those Citywire spoke with is that the broader market tends to perform well over the long term irrespective of the party in power. Eric Gerster, chief investment strategist with AlphaCore Wealth Advisory, said he emphasized that message to clients in a pre-election webinar in August, with the caveat that certain sectors tend to benefit depending on the party in control. …
… Tax cuts on the horizon
With a Trump presidency, much of the focus from the RIA world now shifts to specific policy areas such as tax law and regulation.
The expectation is Trump will usher in a new round of tax cuts, likely extending many of the provisions of the 2017 Tax Cuts and Jobs Act (TCJA), which are scheduled to sunset next year. That could have implications for all aspects of financial planning, but estate planning in particular, as several estate planning tech companies rolled out programs this year in preparation for the expected end of the law’s provisions.
John Krambeer, CEO of Validus Capital, said that although it’s unknown what will happen to those regulations set to expire next year, his firm is preparing clients for a scenario in which those policies are no longer in effect.
‘Obviously we’ve got a sunset of the TCJA here at the end of ‘25. This has been a big conversation amongst families here, certainly over this year… So it’s a little early to know where that’s going to go,’ Krambeer said. ‘We’ll probably, at this moment, go with the belief that it will sunset.’
Krambeer added that in the short term, at least, clients will see a bump in certain Trump-friendly stocks — such as Tesla — as well as a boost in small caps, which are ‘up probably four or five percent this morning,’ he said.
Still, Scott Little — a vice president of Berkshire Money Management — said advisors should not get complacent given that the short-term lift will fade, and policies will become increasingly important to the economic environment.
‘It’s going to take time for the market to really figure this out, because it’s not only the policies. Hey, everybody wants their taxes cut… But the other side of that equation is our ballooning national debt and our annual deficits,’ Little said. ‘If all of these things were done based on a Republican wave, how are we going to pay for them? It’s not all just this free lunch, this really wonderful outcome.’ …
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