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It’s easy for advisors to appear valuable during strong-trending bull markets, but their real value is borne out during of times of uncertainty, i.e. the current market environment.
Less than four months into 2025, advisors and clients alike are tired of the word “uncertainty,” but it’s an accurate descriptor of the current state of affairs. Tariffs are rattling global markets and the White House’s recently assault on the independence of the Federal Reserve is unnerving market participants as well. Regardless of one’s feelings about Jerome Powell and company, that issue likely wasn’t on some 2025 bingo cards and it represents one more element of turbulence with which investors are contending this year.
Add it all up and it’s plausible that many investors are lacking confidence. There’s a cure for those doldrums: advisors. Financial pros are clear sources of esteem for their clients, so much so that numerous studies confirm that those working with advisors are more confident and optimistic about their financial futures.
Why Confidence Matters
Macroeconomic and geopolitical volatility coupled with central bank strife – unfortunate orders of the current day – breed uncertainty and that lack of clarity fosters gloomy outlooks. Consider the findings in a recent Beyond Finance survey, which indicates a mere 13% of respondents feel “very good” about their current financial situations.
One of the silver linings from the polls is that many respondents are looking to capitalize on today’s rocky environment to better fortify their financial futures and that’s good news because working with advisors is the right way to accomplish that objective.
“Against a backdrop of rising costs and financial instability, people are prioritizing future security more than ever before. But that urgency hasn't yet translated into confidence,” notes Beyond Finance. “51% said today's economic uncertainty has pushed them to improve their financial knowledge, with nearly 60% planning to increase their financial understanding this year.”
Relevant to advisors is that just half of those queried have “a lot” of trust in their abilities to run their own finances. That’s probably overstated by 10% to 20%, implying now is an ideal time for advisors to add to their client rolls.
Demographic Dynamics Matter, Too
Tumultuous times also have ways of highlighting important demographic trends advisors need to be aware. For example, Beyond Finance points out 72% of women manage finances on their own, but “over a third currently feel somewhat-to-very bad about their financial situation.”
Not surprisingly, there are age considerations. Perhaps due to the fact that they haven’t experienced a traditional bear market in their investing lives, Gen Zers remain optimistic about the near-term while their older counterparts are weighing short-term market gyrations against the backdrop of long-term goals and planning.
“Meanwhile baby boomers and the Silent Generation are more methodical, with 64% of boomers saying they weigh both short- and long-term goals equally. Millennials and Gen X fall in between, with many voicing ambition but still grappling with self-trust and economic headwinds,” concludes Beyond Finance.
Related: Amid Market Uncertainty, Wealth Managers Forge Ahead with Growth Plans