Advisors Get Mixed Reviews From Clients Amid Market Volatility: J.D. Power

So far, the survey found, advisors’ performance has been mixed in managing their clients’ emotions around tariff-related market activity.

Rattled Investor Confidence 

In the two days following the Trump administration’s April 2 tariff announcement, the S&P 500 plummeted by more than 10%. That sudden spike in volatility unsettled investors, with 56% saying the investment climate was the worst they had ever seen. Another 33% said they had experienced worse, and 11% were unsure.

Forty percent of respondents said the tariffs were hurting their portfolios and prompting them to rethink their strategy. Thirty-four percent said they were unsure how their portfolios were faring but were worried about the potential effects of the tariffs. Only a quarter of investors believed that the tariffs would not affect their investments.

Seven in 10 investors surveyed reported that they work with a financial professional or dedicated advisor to manage their investments, while 25% manage their portfolios on their own and 7% have a family member look after their investments.

J.D. Power noted that investor confidence is highly correlated with professional guidance. Respondents who work with a dedicated advisor were least likely to say the tariff news is causing them to rethink their strategies, while those who trade/invest without professional help are most likely to be rethinking their portfolios.

Tariffs’ Effect on Portfolios

The survey sought to determine how the administration’s tariffs would affect portfolios over the short and long term.

Forty-one percent of respondents said the tariffs’ effect would be negative over the next 12 months, and 32% believed that would be the case over the next five years.

At the same time, 26% said the tariffs would have a positive effect in the short term, and 31% said the same about the long term. Similarly, 23% expected no effect from the tariffs in the next 12 months, and 21% expected none in the next five years.

Seeking Reassurance From Professionals

A majority of investors in the survey said they had received proactive outreach from their advisors in response to the tariff announcement. Fifty-seven percent said their advisor had engaged via low-touch methods such as emails, text messages and letters.

A similar percent described high-touch methods, including phone calls, video conferences and in-person meetings. In some instances, advisors used both high- and low-touch methods to contact clients.

Eighteen percent of investors said their advisor had not contacted them following the tariff announcement.

Some of the advisor interactions with clients were more effective than others, according to the survey. Fifty-two percent of respondents said they were reassured by their advisors and believed they were well-guided through this period of volatility.

However, 31% said they were left uncertain by the interaction and did not feel like they had received enough support. Another 7% expressed frustration that they were not getting the guidance they needed, and 10% were unsure.

Among investors who trade/invest without any professional help, 40% said they were probably or definitely likely to work with an advisor in the next 12 months. Here’s how that broke down by generations:

• Generation Z — 51%
• Younger millennials — 52%
• Older millennials — 59%
• Gen Xers — 32%
• Baby boomers — 17%
  

As to action that respondents are taking in response to the tariff-related volatility, 35% said they are holding off until the market stabilizes, 28% are seeking safety in bonds, cash and gold, and 25% are diversifying their portfolios to spread risk.

Twenty percent said they are making no major changes and are sticking to their long-term plan.