How advisors are turning to tech amid broader tariff tantrums

It's been just over 80 days since President Donald Trump took office for his second turn at the White House, with little time wasted declaring tariffs on scores of US trading partners across the world.

And at this point, 12 days since his latest "Liberation Day" tariff orders sparked record turbulence in the stock markets and precipitated a seismic selloff in Treasuries, it's probably safe to say: it's the end of the world economic order as we know it, and Americans aren't feeling fine.

The latest preliminary read of consumer sentiment released by the University of Michigan last week showed confidence languishing at 50.8 points for April, roughly seven percentage points below March. Both of those readings were significantly below the 77.2 print registered in April last year.

The initial results for April also reflected a broader climate of gloom, with the university's benchmark of current economic conditions standing at 56.6 points, a marked decline from 79 points in April last year.

"Sentiment has now lost more than 30% since December 2024 amid growing worries about trade war developments that have oscillated over the course of the year," said Joanne Hsu, the director of the university's surveys of consumers.

In its own sentiment survey conducted in the week up to April 9, the American Association of Individual Investors found 58.9 percent of its members feeling bearish on the stock market's prospects over the next six months. Around one-third (28.5 percent) were bullish – possibly due in part to the 90-day tariff pause the president declared on Wednesday, which didn't include China – leaving 12.5 percent in a neutral position.

To be sure, times like this are acid tests for clients' trust in their advisors. And on the other side of the desk, advisors are using technological tools and software to offer much-needed reassurance.

"We use eMoney for our financial planning software," says Kelly Renner, CFP professional at Life Strategies Financial Partners in Georgia."It's really easy for me to pull up the percentage and go 'look, it didn't hurt your plan that much.' "

Renner has been proactive in calling her clients, particularly newer ones she knows haven't gone through downturns before. Compared to the broader population of Americans, she says her clients have been calm overall, with only two clients getting in touch with questions.

"If [our retirees are] taking cash from their portfolio, we have one to two years cushioned so this doesn't matter to them," Renner says, noting it would take a significant drop in the market to materially impact her clients' portfolios. "If it doesn't recover, than I guess we're all in trouble."

Timothy Ralph, wealth manager and partner at Merit Financial Advisors, says his firm has been using Holistiplan for its active tax management capabilities.

"Many clients are seeking to sell and rebalance portfolios. This could possibly lead to taxes given the last two years of good markets," he said in an email. "Having this tool has allowed us to quickly review, measure and advise on what the tax impacts are of a large sale of concentrated stock and the future impacts of changing into a diversified portfolio."

Ralph says another portfolio analysis tool, Hidden Levers, has also proven its worth in providing clients with insights on rebalancing, doing stress tests to model out potential tariff and inflation impacts, and expected cash flows.

Michael Dunham, director of planning at Fontana Financial Planning in Dallas, Texas, says the downturn has been an opportunity to refocus client conversations on Roth conversions using FP Alpha.

"We get every client’s tax return and run it through FP Alpha each year to calibrate an optimal amount to convert from IRAs to Roth for our clients where that is an appropriate strategy," Dunham explained in an email. "Having this dialed in allows us to be opportunistic as we are able to convert a larger percentage of the account during a downturn for the same tax cost with the recovery becoming tax-free."

Beyond retirement account rollovers, he says FP Alpha can help uncover tax-loss harvesting opportunities based on tax returns from previous years, as well as optimize estate plans by simulating gifting strategies for clients near or above the estate tax threshold.

"Gifting during market downturns can be smart [for those clients] as it allows gifting of more shares with the recovery being subject to capital gains taxes at the recipient’s tax rates," Dunham says. "If the recipient is a young adult or earns little income, there can also be an opportunity for those capital gains to be realized at the zero percent long-term capital gains bracket."

When it comes to technology, the output you get is only as good as what you put in. To that point, Ralph at Merit Financial stresses the importance of continually updating clients' information.

"As part of our planning process, we work with clients to have the information ready to go so when the time comes to make a decision it can be done in a timely manner," he says.

Among his firm's various technology partners, Spencer Knickerbocker, partner and chief investment officer at Stonebrook Private called Flourish Cash "an easy favorite," noting its ability to provide visibility into clients' held-away cash holdings.

"Last week, our advisors were able to quickly identify clients who might be in a position to take advantage of market volatility with the Flourish platform," Knickerbocker says.

Along the same lines, Renner highlighted eMoney's ability to aggregate many of her clients' various retirement accounts – for those on platforms that don't integrate with eMoney, details have to be entered manually – into one holistic view that creates a solid foundation to give her clients' confidence in their finances.

"As a planner, I can't give them good advice if I don't know the whole picture of their finances," she says. "Nobody likes uncertainty ... if you can see and get certainty in your own world, you can feel better."