Do Politics Impact Referrals?

9/1/2021

 Politics can impact many components of an individual’s life.  Political opinion can be indicative of opinions and actions on many different topics outside of voting and is evident everywhere.  Spectrem sought to determine if politics impacted various components of their financial decision making, including if political affiliation impacts an 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 for an investor to identify with: Republican, Democrat, and Independent. 

There are some topics that everyone agrees upon, such as overall satisfaction.  Eighty-nine percent of Republicans feel their advisor is excellent or very good, while 90 percent of Democrats and 86 percent of Independents feel that way.  Satisfaction 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, which should make their likelihood to refer their advisor nearly the same, yet they are very different.  Seventy one percent of Republicans have referred their financial advisor at least once in the past five years, while only 61 percent of Democrats have done so, and 58 percent of Independents have referred their financial advisor in the past five years.


The reasons behind not referring an advisor are varied, but not significantly by political affiliation in most cases.  Forty-two percent of Democrats feel that it simply isn’t their place to tell others where to go/what to buy.  Republicans and Independents are even more likely to have that reason be the most commonly identified as to why they do not refer their advisor.  Over a third of investors, regardless of political affiliation, do not refer their advisor because they do not discuss those topics with friends and family.  One interesting difference however is that 30 percent of Democrats simply don’t think about giving the referral, while 22 percent of Independent investors and only 16 percent of Republicans do not think about referring their advisor.

The type of referral they provide also differs somewhat.  Democrats are more likely to define a referral as making a formal introduction to their primary financial advisor, while only 17 percent of Republicans feel similarly.  The length of time the investor has been with their financial advisor also varies based on political affiliation.  Thirty-eight percent of Republicans have been with their financial advisor for at least 15 years, while only 27 percent of Democrats and 32 percent of Independents have a relationship that long with their advisor.

Advisors often know the political affiliations of their clients and vice versa, as 28 percent of wealthy investors are looking for an advisor that shares their political views.  Investors who find political party affiliation to be important may want to consider discussing those topics with an advisor they are considering hiring.