Financial advisors are feeling cautious optimism about the US economy and client prospects, even as they prepare for ongoing market volatility and policy shifts, according to two new industry surveys.
The latest RIA Economic Outlook Index from Security Benefit, conducted with Greenwald Research, shows advisor sentiment slipping slightly in the third quarter but remaining in positive territory.
The index, which measures sentiment on a scale from zero to 100, fell to 58 in the third quarter from 60 in the previous quarter. Despite the dip, most advisors surveyed do not view inflation as a near-term threat.
Nearly seven in ten expect inflation to remain below 3% over the next year, while just under one-fourth anticipate a modest uptick into the 3 to 3.9% range.
With the Federal Reserve recently lowering short-term rates to a target range of 4 to 4.25%, advisors are watching for further cuts. More than four-fifths expect another rate cut this year, and nearly one-third have already increased client exposure to equities in response.
Many are also considering products that offer protection against market loss, such as fixed index annuities, as they seek to balance growth opportunities with risk management.
“Advisors remain broadly confident about the road ahead, even as they keep a close watch on shifting market dynamics,” said Mike Reidy, national sales manager for the RIA channel at Security Benefit. He added that RIAs are “positioning portfolios to capture upside while staying prepared for potential changes in Fed policy.”
The Security Benefit survey also found that 64% of RIAs expect the S&P 500 to rise over the next year, though there is less agreement on exactly how much it will ultimately gain. Eighteen percent foresee gains of 10% or more, about one-third expect increases in the 6 to 9% range, and 15% anticipate more modest growth of 3 to 5%. Only 15% expect the index to decline.
Advisors are split on volatility, with 59% predicting it will stay the same or decrease, while 42% are bracing for more turbulence.
Recession fears have eased somewhat, with 57% of RIAs seeing a low or no likelihood of a downturn in the coming year. Meanwhile, six in ten believe that the recently passed One Big Beautiful Bill Act will help stimulate the economy.
A separate joint survey from US News and AdvisorFinder, conducted between late July and August, paints a moderately upbeat picture on client readiness and practice management. Nearly 72% of advisors said clients are better positioned to reach their retirement goals, despite persistent concerns about Social Security and market volatility.
About half of those surveyed think tax burdens will improve for clients in the coming year, focusing on OBBBA's rate extensions, a special deduction for seniors, and exemptions for overtime pay and tips.
“History shows that every time we think, ‘This time is different,’ the markets behave the same: Eventually, they adapt to new circumstances,” one advisor wrote in the survey.
Another respondent emphasized the importance of planning, advising clients to “review your financial plan. If you don’t have one, create one. Planning is the key to meeting your goals.”
The adoption of artificial intelligence tools is also widespread among advisors, with more than 80% reporting use of AI for administrative tasks, client communications, and investment research.
Advisors are generally optimistic about their own business prospects as well, with nearly 59% expecting their firm’s assets under management to grow by more than 10% in the next year.
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