Republicans will take control of the Senate, capital gains taxes will increase, equities and the economy will hold steady and the Department of Labor will not change the definition of fiduciary.
Sound like wishful thinking? Perhaps. But those are the findings of the Financial Services Institute's recent poll of its members, which found that the economy is a top issue and that Mitt Romney is the top choice for president, garnering 81 percent of respondent votes. However, asked who will likely win in November, Romney comes out just slightly ahead of Barack Obama, leading with 53 percent of the vote by respondents, versus just 47 percent of the vote for Obama.
The poll, conducted last week among almost 2,300 advisors across the country, contrasted with the findings of a similar survey taken in February.
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These same advisors saw jobs and the economy as the top issue affecting their vote, with 63 percent of respondents placing it as their number-one priority. Coming in second and in a similar vein, the national debt garnered 21 percent of the vote.
Most respondents, 70 percent, felt that the U.S. Senate will be taken back by Republicans in November. This number is consistent with February's responses.
A whopping 95 percent felt that capital gains taxes will be heading up. This is of little surprise, however, since rates were kept low as part of an extension of the Tax Increase Prevention and Reconciliation Act of 2005, which was extended by President Barack Obama in 2010. Those extensions are set to expire this year.
When it comes to performance in the equity markets, the numbers were all over the board, with a majority of respondents, 64 percent, feeling that stocks won't move at all for the rest of 2012. Less than one-quarter of respondents felt stocks would be either strong or weak throughout the remainder of the year.
Of particular interest to this group of professionals is a current discussion at the U.S. Department of Labor and in Congress which would mandate that financial advisors have a "fiduciary" responsibility to provide impartial advice to their clients.
If enacted, this could effectively prohibit the commissions that financial advisors collect on any products they sell to their clients concerning IRAs and other retirement investments. In this survey, 89 percent of respondents, many of whom receive commissions for their services, did not want the definition of fiduciary to be changed legally.
More than two-thirds of respondents, 69 percent, felt the economy will stay flat for the rest of 2012, while 73 percent of respondents professed to considering a business model that included a greater movement and reliance on fees rather than commissions in the future.
"This poll shows the economy and taxes are weighing heavily on the minds of advisors," said Dale Brown, president of FSI. "They are bracing themselves and their clients for a stagnant economy and an increase in capital gains taxes."
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