Inflation, Market Uncertainty Drive Advisor Skepticism
High inflation and uncertain markets are leaving registered investment advisors (RIAs) rather cautious in the year ahead, reports new findings from life insurer Security Benefit.
The company’s RIA Economic Outlook measured advisor sentiment at 53 out of 100 in the fourth quarter, with 100 being extremely optimistic. The score is the lowest since the index was introduced in Q1 of 2024 and follows several periods of continual decline.
“Advisors are clearly recalibrating expectations as they head into 2026, but this isn’t a retreat from the market,” said Mike Reidy a national sales manager of the RIA Channel at Security Benefit. “RIAs are balancing heightened volatility concerns with disciplined portfolio strategies, staying focused on long-term goals while helping clients navigate a more uncertain environment.”
Skeptical inflation expectations, along with rising unemployment rates, were the leading causes for the decline, the findings report. The unemployment rate is currently at 4.4% as of December, according to the Bureau of Labor Statistics (BLS).
While today’s inflation rate stands at 2.7% according to the Personal Consumption Expenditures (PCE) Price Index, just 42% of advisors expect inflation to remain below 3%, down from 69% in the previous quarter.
Market volatility concerns also rose in the last quarter, with 50% of RIAs who now expect stock market volatility to be higher over the next 12 months than in 2024, up from 42% in the third quarter.
Further, 23% of advisors report feeling “extremely” or “very” concerned over the possibility of a major equity market downturn, up from 16%.
Conflicted views on federal policy
The current political climate has left some advisors weary of the overall market landscape. While 54% of RIAs believe the Trump Administration will have a positive impact of the U.S. economy in 2026, 33% anticipate a negative impact driven by President Donald Trump’s tariffs and general concerns over the federal debt.
Nearly half (45%) of RIAs expect trade and tariff policy to have a negative impact on equity markets over the next 12 months whereas 26% expect it to have a positive influence, reports Security Benefit. Twenty-nine percent are neither sure over how markets will be shaped or believe there will be no negative or positive impact.
Outlooks on the federal budget were more moderate, with 20% of advisors expressing a negative impact to the economy.
Managing volatility
To prepare for possible fluctuations, Security Benefit says RIAs are diversifying portfolios while avoiding withdrawals from potential growth opportunities. Thirty-four percent of RIAs increased their allocation to international equities in Q4.
Other findings report that just one in 10 RIAs expanded allocations to annuities in the fourth quarter, and 46% are focused on deepening existing client relationships over client acquisitions (29%).
Using Greenwald Research, Security Benefit surveyed 100 registered investment advisors (RIAs) on business practices, economic outlooks, financial product usage, and client demographics.
Security Benefit holds $59.5 billion in assets under management (AUM) as of September 30, 2025.
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.