Do Politics Impact Referrals?
Politics can impact many components of an individual’s life. Political opinion can be indicative of actions on many different topics. How does politics impact a wealthy investor’s likelihood for making a referral of their financial advisor? Is one political party more likely to refer their financial advisor than another?
Spectrem’s recent research shows that many different components of an advisory relationship are impacted by politics. How likely they are to recommend, why they would choose not to recommend, and how quickly they expect their advisor to return a phone call all vary based on political affiliation. Spectrem identifies three categories of political affiliation; Republican, Democrat, and Independent.
There are some topics that everyone agrees upon, such as overall satisfaction. Eighty-three percent of Republicans are satisfied with their advisor, while 84 percent of Democrats and 82 percent of Independents feel that way. Satisfactions with responsiveness to requests and expertise of advisor are similar, where all political affiliations feel nearly the same.
That means that levels of satisfaction are materially the same, while making a referral to their advisor is different. Republicans are the most likely to refer their clients to a friend or colleague at 54 percent. Only 50 percent of Independent investors feel that way. Republicans are also more likely to refer their advisor in the next 12 months and they refer more often. Thirty percent of Independent investors never refer their advisor. Less than a quarter of Republican investors never refer their advisor.
The reasons behind not referring an advisor are varied. Two-thirds of Democrats feel that it simply isn’t their place to tell others where to go/what to buy. Republicans are more likely than Democrats or Independents to have concerns about friends or families having a bad experiences.
While Republicans are more likely to refer, they also have high expectations of their advisor. Over half of Republican investors expect an advisor returns a phone call within 5 hours, while only 42 percent of Democrat investors expect the same. Independent investors fall in the middle, with 49 percent expecting that return call within 5 hours or less.
Advisors often know the political affiliations of their clients, as 28 percent of wealthy investors are looking for an advisor that shares their political views. Being aware of political affiliation allows financial professionals to cater their service to each individual client and their preferences.