Econintersect: The Occupy Wall Street movement by the 99% has been getting all the publicity, but Reuters reported yesterday that there is apparent unrest among the 1% as well. Reuters says the rich are angry over U.S. government gridlock and are expressing this by refusing to make political contributions. The statement is based on interviews with financial advisors for the wealthy. Information from Campaign Finance Institute reveals that, in the second quarter of 2011, Republican presidential candidates as a group has raised only about 1/3 of the $115 million from individual donors that were raised in the same quarter four years ago.Some excerpts from Reuters:
Bessemer Trust CEO John Hilton says in his 42 years advising ultra high-net worth investors, he has never seen clients so frustrated with the state of affairs in Washington.
He said a number of the firm’s clients – who have an average of $30 million in investable assets – say they believe a lack of leadership and political wrangling are the primary cause of recent market problems – and the declines in their portfolios. Because of that, they say they’re saying no to requests to make political contributions.
“People are pissed,” said Alan Ungar, an adviser with Critical Capital Management Inc. in Calabasas, California. His clients have an average $1.6 million or more in assets invested with the firm. “This isn’t about taxes,” he said. “It’s about the partisan dynamic.”
In the Washington, D.C. area, wealthy donors are often active in fund-raising for presidential campaigns. This year, many are sitting on the sidelines, said Ted Halpern, a Rockville, Maryland-based financial adviser whose average client has more than $2 million in assets.
Jim Heitman, an adviser with Compass Financial Planning in Alta Loma, California, whose average account size is $1.3 million, said several of his clients are usually active in their parties. But this year, they’re doing less and some are using the money they earmark for political contributions to pay off mortgages on vacation homes or to invest in alternative assets like gold, he said.
“The attitude is increasingly ‘a pox on both their houses,'” Heitman said.