The chief executive of mid-sized brokerage firm Janney Montgomery Scott says the federal government shutdown is creating volatility that’s bad for financial markets, but he’s more worried about an approaching conflict over raising the U.S. debt limit.
“I think the uncertainty leaders in Washington are creating is not helping investor confidence, and we’re seeing it in the markets,” Timothy Scheve said in an interview this week during a visit to the Philadelphia-based firm’s Charlotte office.
Scheve, who was in town to celebrate the office’s 10-year anniversary, said the bigger threat is an Oct. 17 deadline to raise the limit on how much money the government can borrow, a step needed to ensure the United States can pay its bills. He said he expects Congress to ultimately take action, but he expects drama “right up to the wire.”
Scheve wasn’t among the leaders invited this week with Bank of America CEO Brian Moynihan and other financial chieftains to meet with President Barack Obama, but he said if he had been there his message would have been simple.
“Sit down and negotiate,” he said. “Life’s about negotiations. Life is about give and take and through that coming up with a solution.”
As for how investors should react, Stuart Singer, Janney’s Charlotte branch manager, said he’s advising clients to take a long-term view.
“We tell them to sit tight, and eventually it’s probably going to be a buying opportunity” as prices for stocks fall before rebounding, he said.
Janney’s Charlotte office in SouthPark has seven advisers, down slightly after two retirements, but the number is expected to grow over time, Scheve said. The firm has more than 700 advisers mostly along the East Coast in its private client group and will addmore through selective hires over time, he said.
Better known in the Northeast, Janney is targeting the Southeast for expansion. About a year ago, it hired a new leader for the region, Andrew Kistler, and it has added offices in Aiken, S.C., and advisers in Columbia and Hilton Head. The privately held Janney is owned by the Penn Mutual Life Insurance Co.
“The emphasis is to continue to build the Southeast,” Scheve, who joined Janney in 2007 from Legg Mason, said. “We see it as a really nice opportunity for us.”
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