Advisors weigh in on election results

(June 30, 2004) B.C. advisor Beatrice Grant took more than a casual interest in Monday’s federal election. Grant worked with the Conservative party in her riding of South Surrey-White Rock-Cloverdale, helping candidate Russ Hiebert capture the seat with 43% of the vote.

“He ran a really good campaign and I think he is going to do a great job in Ottawa,” says Grant, a CFP who was the party’s financial agent in the riding.

Grant says the election went pretty much as she expected, although she did think the Conservatives would win a few more seats in British Columbia.

She concedes that while many voters were tired of the Liberals, they were also afraid of the Tories. “They just didn’t know what Stephen Harper stood for on a lot of issues. They were worried about him taking drastic measures, so they voted Liberal.”

Ivan Chang, a CFP with Scotia McLeod in Richmond, B.C., also wasn’t surprised by the results of the election. “I thought this was the likely outcome. Canadians say they want change, but they’re fearful of the alternatives, so go back to the status quo.”

Grant says that while she doesn’t really talk politics with her clients, she has noted a general concern about the country’s financial health, particularly on issues related to the debt, spending and government waste.

“People are worried about having enough money for retirement or to cover medical costs should they become disabled,” she says. “They don’t think they’re going to be able to afford it, so there’s a big fear there.”

Chang also tends to shy away from political discussion with clients, though some have asked questions about the election. “I indicated that in the past minority governments could have the potential for a bit more volatility in terms of the effect on the economy,” he says.

On the other hand, this minority government appears stable and stock markets shrugged off the election results. Chang says the market had already factored in the outcome and notes that the Liberals will likely not be embarking on any big new spending programs, since all decisions will be watched closely by the other parties. “So it’s not that negative right now.”

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A minority government means Canadians could be going to the polls again soon, but Grant doesn’t expect another vote for a couple of years. “People are glad to get it over with so if a party forced another election in the next year, I don’t think they would be too popular with the public.”

However, the minority situation does create other challenges, particularly on the regulatory side, notes Beverly Brooks, vice-president of public affairs at Advocis.

“I’ve talked to a lot of people in the financial services sector and there’s certainly the sense that under a minority government, a number of issues will not proceed because they are extremely controversial,” says Brooks. Two potential casualties on that list are bank mergers and a national securities regulator.

“Minority governments are very careful with the initiatives they undertake, they have to be supported by their allies under whatever coalition is formed. These are controversial issues, therefore a minority government won’t go near them.”

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Do you have any thoughts about the election? Have your clients voiced any concerns about the minority government? If so, how are you alleviating their concerns? Share your opinions in the Talvest Town Hall on Advisor.ca.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com

(06/30/04)

Doug Watt