Financial advice issues aren't always at the top of the agenda during presidential elections, but the first Democratic debate of the 2016 presidential election Tuesday night could prove the exception.
Advisers should look for whether Hillary Clinton affirms her support for the Labor Department's rule requiring a fiduciary duty for all retirement advisers.
The former Secretary of State and leading Democratic presidential candidate has so far
provided only implicit support for the administration's plan to change standards for those advising clients on 401(k)s or IRAs.
She will be flanked by Vermont Sen. Bernie Sanders, an independent who's running a surprisingly strong campaign, and former Maryland Gov. Martin O'Malley, who only receives about 1% of support in polls. Both candidates have explicitly said they support the DOL fiduciary proposal.
Neither the Clinton nor Sanders campaigns responded immediately for comment, while Mr. O'Malley's spokesman, Sean Savett, did reaffirm the former governor's commitment to fully implement the fiduciary rule.
The other two declared Democratic candidates for president are former Virginia Sen. Jim Webb and Lincoln Chafee, Rhode Island's ex-governor. They will stand on the outer ends of the panel that will face off Tuesday night in Las Vegas in a debate sponsored by CNN and Facebook.
“Hillary is much more conservative financially than all the other candidates who will be on the stage,” said Paul Auslander, director of financial planning at ProVise Management Group. “Most [advisers] don't like her personally, but she would actually be OK for financial planners.”
(More: "What a Hillary Clinton presidency would mean for financial advisers")
The scariest prospect for financial advisers is the Democrat who hasn't even said publicly whether he will run for the nomination, Vice President Joe Biden. He's actually running third after Mr. Sanders in national opinion polls, without even putting his hat in the ring.
Mr. Auslander believes Mr. Biden would only get into the race if Ms. Clinton makes a “mortal” misstep that looks like it could cost her the nomination. If he were a presidential candidate, Mr. Biden could bring Sen. Elizabeth Warren, D-Mass., onto the ticket as vice president, he speculated.
“Most financial planners loathe anything to do with Elizabeth Warren,” he said. “She is the bane of the industry.”
Ms. Clinton may also weave into her answers some of the financial reform plans she laid out last week that call for reducing systemic risk in financial markets, strengthening regulation of risky financial products and increasing funding for the Securities and Exchange Commission.
Tax proposals also could be aired tomorrow night, as Ms. Clinton already has thrown support behind
increasing capital gains rates for investments that are held for shorter periods of time.
One issue Democratic candidates may prefer to avoid during the debate is changes to Social Security, even though it was
a topic discussed by Republicans at their first presidential debate held in August.
Democrats don't even want to entertain the idea of raising the age to apply for Social Security, Mr. Auslander said.
“That would be political suicide,” he said.
