More than 60% of independent advisors express strong confidence in their ability to expand their practices despite bearish sentiments on U.S. equities, according to a recent Interactive Brokers survey.
The April survey, which polled 113 fee-based advisors managing an average of $56 million in client assets, reveals an industry recalibrating amid market turbulence. Concerns over tariffs and unpredictable U.S. policies have driven many advisors to rethink their strategies, emphasizing diversification and exploring new growth opportunities.
Reducing U.S. Equity Exposure
A significant 40% of advisors reported scaling back their clients’ investments in domestic equities, while 42% are increasing allocations to international markets. Nearly half identified tariffs or shifting U.S. policy as their primary concerns. These findings underscore the growing wariness surrounding the U.S. market's volatility and its implications for portfolio performance.
Diversifying Asset Classes
In addition to reallocating geographically, advisors are broadening exposure across asset classes. Key shifts include:
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Cash Positions: 40% of respondents are boosting U.S. cash holdings, emphasizing liquidity amid uncertainty.
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Foreign Currencies: 28% are increasing exposure to non-U.S. currencies as a hedge against domestic risks.
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Fixed Income Investments: 29% are growing positions in bonds, balancing portfolios with steady income-generating assets.
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Cryptocurrencies: 22% are exploring digital assets, reflecting the increasing acceptance of crypto as a viable diversification tool.
Heightened Bearish Sentiment
Overall, 62% of advisors reported a more bearish outlook compared to last year. Steve Sanders, Executive Vice President of Marketing and Product Development at Interactive Brokers, noted the prevailing anxiety: “There’s a general nervousness from everybody about what’s going to happen next.”
This cautious sentiment aligns with broader industry trends. Barron’s Big Money poll, conducted around the same time, highlighted professional investors’ heightened pessimism, marking the lowest confidence in nearly three decades. Many are moving portfolios away from U.S. equities toward foreign markets, fixed income, and alternatives to mitigate risks.
Interactive Brokers has also observed increased interest in its non-U.S. equity and bond offerings. “What you see in the survey, I see in the stats,” Sanders remarked, pointing to a tangible shift in trading activity.
Opportunities in Volatile Times
Despite bearish views on the U.S. market, advisors are bullish on their business growth prospects. Over 60% of survey participants expressed confidence in their ability to attract and retain clients in 2025. High market volatility, they believe, creates a natural demand for professional financial guidance.
“When there’s more volatility in the markets, there’s more business,” Sanders explained. “When markets move sideways, it’s not as good for advisors or brokers.”
This dual narrative—caution about market performance coupled with optimism about client acquisition—reflects the resilience and adaptability of independent advisors. By leveraging market uncertainty to position themselves as trusted partners, many are not only weathering the storm but thriving in a challenging environment.
The findings highlight a critical takeaway for wealth advisors: in times of market turbulence, diversification and proactive client engagement remain essential strategies for success.
