Advisors’ optimism rises, but caution tempers outlook as year-end 2025 approaches

Independent RIAs are heading into the final stretch of 2025 with a cautiously optimistic view of the markets, according to the latest Advisor Insights Survey from Interactive Brokers.

While just over half of advisors surveyed (51%) describe themselves as bullish on US markets, the survey reveals that optimism is balanced by persistent concerns about market risks and client anxieties.

The fall update to Interactive Brokers’ survey – conducted in September among 116 independent advisors – shows a notable shift in sentiment since the spring. The share of bullish advisors has climbed by 65% since earlier this year, while the proportion of bears has dropped by 44%.

That's not to say optimists have won the day. Another look at the data shows 59% of respondents said they have changed their market outlook since June, with nearly one-third reporting they have become more bearish – edging out the 29% who have grown more bullish.

Advisors’ top concern is the potential for a market correction (22%), cited more frequently than geopolitical instability (19%), changing US policies (15%), and the risk of a recession or economic slowdown (9%). When asked about clients' worries, a large plurality of respondents pointed to the impact of volatility on their portfolios (41%), followed by retirement planning and income security (30%).

The survey also highlights how advisors are responding to these risks by actively adjusting client portfolios. Twenty-one percent are dialing up allocations to US equities, while 41% are boosting exposure to non-US equities.

At the same time, more than one-fourth are reducing cash holdings (27%) – nearly equal to those building up cash (28%) – and a significant minority are ratcheting up exposure to fixed income (31%), cryptocurrencies (29%), and commodities (31%).

Advisors also pointed to the year’s biggest surprises, with tariffs (35%) and the surge in gold prices (19%) standing out as the most unexpected events.

Steve Sosnick, chief strategist at Interactive Brokers, noted that “markets rely heavily on investor psychology,” adding that it would not be surprising if both advisors and investors “become more reflective about the balance between risk and reward as we get closer to the end of the year.”

Despite the measured outlook on markets, confidence in business growth remains strong. Seventy-two percent of the independent RIAs surveyed said they are confident in their ability to grow their practices in 2025, with nearly one-fifth describing themselves as extremely confident.

The survey also points to a rapid embrace of new technology. Four-fifths of advisors (79%) reported using generative AI-enabled tools in their work, and 58% said their use of gen AI has increased since the start of the year. 

The Interactive Brokers survey reflects responses from advisors with an average of 16 years’ experience and nearly $80 million in client assets under management.