Why recession could spell opportunity for growth-centered advisors

As fears of a recession have spiked among consumers, business owners, and investors in the past month, the new climate of economic uncertainty could present an opportunity for at least some advisors to grow their practice, according to a new report.

The Ensemble Practice’s “How Investors Choose 2025” report revealed that economic downturns are a powerful catalyst for financial advisor searches, sitting alongside inheritance and retirement as the most common triggers for new client relationships.

“Recessions are an under-appreciated driver of growth for advisors, prompting clients to re-evaluate their financial approach,” the report said. The death of a spouse and relocation to a new city were also named as significant life changes that can initiate an advisory search.

There seems to be no getting away from recession warnings in the weeks following President Donald Trump's "Liberation Day" tariff announcement on April 2. Apart from gloomy sentiment surveys, a parade of outlooks from top Wall Street economists portended challenges for the US even after Trump walked back his tough talk with a 90-day pause.

Last week, Bridgewater Associates founder Ray Dalio warned that something worse than a recession could be brewing as mounting debt, political tensions, and an upheaval of the world economic order collide into a perfect storm. Federal Reserve Chair Jerome Powell didn't mince words – at least, not as much as you'd expect from the usual Fedspeak – when he warned last week that the inflation and growth risks brought forth by tariffs would make the central bank's job of making decisions on interest rates more challenging.

Recession emerged as a top-three driver for Americans to consider changing their advisors or hiring a new financial professional, with 26 percent of people in the report citing it as a motivator. That's just slightly behind the 27 percent who flagged inheritance events, but ahead of the 25 percent who see retirement as a trigger event.

Another 25 percent said they'd look for a new advisor after the death of a spouse.

Once the search begins, the report found trust remains a north star for advisor selection. In particular, nearly one-third of respondents said they begin by asking friends or family for a recommendation.

However, that is only one entry point. Eighteen percent of investors conduct their own research online, and 12 percent turn to a center of influence like a CPA for advice. Media recognition and employer-affiliated programs were also cited as meaningful sources of influence.

“Investors do significant research on their own online,” the report said. “This is especially true for male investors: 21 percent of men begin online versus 15 percent for women.”

In addition to seeking referrals and conducting digital vetting, investors tend to shortlist the firms they evaluate. Forty-four percent of investors said they compare three firms or fewer, and more than one-third interview only two. Just 11 percent said they evaluate more than three firms before making a decision.

“To be considered by an active shopper, a firm must be in the top three choices; otherwise, it is unlikely to have a chance,” the report said.

The survey, which captured the views of more than 1,000 investors with incomes above $100,000, found that 20 percent of all respondents expect to hire an advisor within two years. That demand includes 17 percent of individuals who have never worked with an advisor before.

Advisory firms looking to expand organically may benefit from targeting mid-career professionals, particularly those in the corporate, tech, or engineering sectors. In terms of age demographics, Gen X respondents, who represented 26 percent of the sample, made up 37 percent of active advisor shoppers.

Online transparency is another critical consideration. Forty-three percent of investors said they expect pricing information to be listed on an advisor’s website, while 41 percent said they look for details on financial planning strategy. Customized portfolio offerings and financial education were also highly valued.