US debt, geopolitics top advisors' market risks list through 2028

Financial advisors are prioritizing structural risks over single events as they plan portfolios for the next three years, according to new survey data from FUSE Research Network.

The FUSE survey research, part of its Advisor Trend Monitor series, canvassed more than 520 financial advisors across channels in early February 2026.

It found advisors’ risk priorities are shaping client conversations and portfolio positioning, with a heavier emphasis on hedging, diversified income sources, and strategies engineered to protect client outcomes.

Read more: A slew of negative news has anxious clients calling their advisors. Here is how they are responding

“Advisors are clearly preparing clients for a market environment defined by structural uncertainty,” said Mike Evans, partner and director of advisor research at FUSE Research Network.

The survey found 46% of advisors ranked government debt and fiscal policy as the top risk for the next 12 months. That number rises to 56% when considering the next three years, reflecting mounting concern about the fiscal outlook and interest-cost dynamics.

The focus on government debt comes as federal finances show strains: Treasury data for the fiscal year to date indicate the budget deficit has topped $1 trillion for this year through February alone, though the gap is smaller than a year earlier as revenues rose faster than spending. Elevated interest costs on a nearly $39 trillion national debt are adding to the fiscal drag.

Government officials and policymakers on both sides of the aisle have floated different approaches to filling the budget hole. The past few months have seen a growing wave of proposals to raise taxes on the wealthy, including proposed measures being advanced in California, New York City, and Washington. The Republican-led federal government has sought to address the fiscal shortfall with tariffs on goods flowing in from overseas, including President Donald Trump's Liberation Day tariffs, though those were struck down in a stunning Supreme Court decision last month.

Other leading worries cited in the survey include geopolitical and global trade disruptions (flagged by 42% in the next 12 months, and 38% over the next three years); financial market volatility and valuations (39% and 32%, respectively); and economic growth and recession risk (38% and 39%). 

“Even before the recent escalation between the United States and Iran, advisors were focused on the potential for geopolitical shocks and policy‑driven volatility,” Evans said. 

As the US-Iran clash looks to drag on into its third week, disruptions to crude markets and shipping in the Strait of Hormuz have caused oil prices to spasm above $100 a barrel. That has led to some gloom-and-doom prognostication that higher energy costs could pressure growth, potentially creating a toxic mix akin to 1970s-style stagflation.

The impact of the latest flareup in the Middle East has yet to show up in the numbers. For now, the latest readings from the Bureau of Economic Analysis showed GDP growth slowing down in the fourth quarter, while the PCE index of inflation came in line with expectations. The Bureau of Labor and Statistics' CPI report this week showed the index increased 2.4% over the last 12 months – in line with expectations, but nevertheless still something for the Federal Reserve to digest as it makes its rate decision next week.

"Events like these reinforce why many advisors are emphasizing risk management, downside resilience, and outcome-oriented investment strategies in portfolios,” Evans said.