Fantasy Financial Planning in the Trump Era

David Ricardo, economist


Face it: Financial planning in the Trump world hinges on politics, not investing.  This makes it more critical than ever for people providing financial advice to tell clients about the implications of political decisions made in Washington and less about the basics of investing.

Everyone has heard of the $26 billion-a-year fantasy football leagues. This figure is how much people spend annually on the hypothetical and optimally constructed teams that battle each other weekly during the season. The fantasy teams play, and investors in the winning teams get rewarded.

Financial planners today also work in a fantasy world. In this world, real clients plan for their retirement futures using accurate statistics (such as their assets, incomes, risk tolerances, etc.), but in a world where some of the most significant financial expenses and risks they face are totally out of their control. These significant expenses include health care, long-term care premiums, mortgages, tax rates, and college tuition costs.  Even the most significant wealth engines–home appreciation and wage growth–are tied to the overall growth of the economy at all economic levels over decades. And worst of all, all this is totally out of the control of the average citizen.

“Capitalism, as it develops, puts in place the conditions for its own demise and replacement by a new system, just as the preceding systems had done.”

This means average people now assume all the risks for their future. Pensions sponsored by employers, who assumed the financial risk in exchange for employee loyalty and productivity, have been replaced by portable 401(k)s that parallel a workplace devoid of loyalty. And while some people, especially social conservatives and Libertarians, will say individual responsibility has always been what made America great, the current situation is much different.

Generations of social and financial safety nets that ordinary people have enjoyed, such as Social Security, Medicare, Medicaid, a predictable tax structure, wage growth, and upward mobility, are all endangered or on the Republican Party’s chopping block. The revocation of the fiduciary rule also works against the common decency of making honest financial advice accessible to all investors by all financial advisors.

As a result, any financial planner who wants to have an honest relationship with his or her clients must include these new, current economic realities in any future financial scenario. But in many cases, I bet this new Republican reality is not being communicated to clients because many large firms want to avoid political discussions. Plus, many advisors have been told to avoid discussing politics even when politics is intrinsically intertwined with the financial future of millions of Americans.

Bring Back the Study of Political Economy

If this is the case, many financial planners engage in fantasy financial planning, whose recommendations and advice are not grounded in current political realities.

Before economics began in the early 18th century, academics and scientific observers who thought about the complex world of society, trade, labor, production, government, and money created the study of “political economy.” This genre of the early study of trade was bolstered by the works of Jean Baptiste Say, Karl Marx, Adam Smith, Thomas Malthus, John Mill, David Ricardo, and John Maynard Keynes. It was the study of political economy that preceded the development of modern economics.

John Meynard Keynes

However, the study of political economy was so sensitive because it addressed the historical evolution of economic systems, including the conditions that could lead to their own destruction. This is why you have discussions about how the “’ natural’” economic order depicted is essentially capitalist relations of production, and the so-called “natural laws” are no more than the laws of capitalist production.”

And more incendiary discussions from a scientific and historical perspective say:

“Rather, capitalism is grasped—along with feudalism and the other preceding systems—as a necessary stage that society passes through on its journey of normal development. The historical mission of capitalism is recognized to be unprecedented in many ways. As it develops, capitalism puts the conditions for its demise and replacement by a new system, just as the preceding systems had done. Once this development has reached a certain point, a revolution is unavoidable, and a revolution is carried out in reality.”

This is something you would never hear in the media today. It is outside the realm of discussion. As a result, politicians, chief investment officers, economists, and even financial planners are unprepared to think this way. None of these groups would ever consider the current financial planning mess from a historical context, nor would they even recognize they are all working within the strict and limited confines of a neoliberal political-economic philosophy that says the “free market system” and unregulated capitalism are the epitome of Western civilization. They are not. Nor would these same people ever consider an alternative political-economic system that is more equitable and less corrupt.

So where does all this leave the fantasy financial planners?

Unfortunately, unless financial planners want to start thinking outside the box, they can continue to use the same model portfolios and client questionnaires to produce fantasy scenarios that have no basis given the dire contemporary political realities. This same tired approach can keep clients moving in and out of the offices, but it certainly will not benefit unsuspecting investors looking for substantial, long-term financial advice.

If average investors want real answers that will benefit their families and grandchildren, they should study political economy, not the latest artificial intelligence day trading strategy.

Financial planners should also reinvent their practices by using real-life political events if they want to make a positive difference to their clients and themselves.



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Chuck Epstein has managed marketing communications and public relations departments for major global financial institutions and participated in the launch of industry-changing financial products. He also has written by-lined articles for over 50 publications, five books and served as editor and publisher of nation’s first newsletter on the topic of using the PC for personal investing and trading. (“Investing Online, 1994-1999). He also is a marketing consultant, writer and speaker on topics related to investor protection and opportunities in the very dynamic cannabis industry. He has held senior-level marketing, PR and communications positions at the New York Futures Exchange, Chicago Mercantile Exchange, Lind-Waldock, Zacks Investment Research, Russell Investments and Principal Financial. He has won national awards from the Mutual Fund Education Alliance (MFEA) and his web site,, was named best small blog in 2009 by the Society of American Business Editors and Writers (SABEW).


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