Registered investment advisors (RIAs) are becoming increasingly cautious as their economic outlook for 2026 evolves. The recent RIA Economic Outlook Index, released by Security Benefit in collaboration with Greenwald Research, shows a dip in advisor sentiment, which fell to 53 in the fourth quarter. This marks the lowest reading since the index’s inception in the first quarter of 2024, indicative of a continued decline in confidence among financial advisors.
Mike Reidy, National Sales Manager for the RIA Channel at Security Benefit, commented on the findings, noting that while advisors are recalibrating their expectations, this does not signify a withdrawal from the market. He emphasizes that RIAs are balancing concerns about increased volatility with disciplined portfolio strategies, focusing on long-term objectives while assisting clients through a more unpredictable economic landscape.
Inflation expectations appear to significantly influence this cautious sentiment. The Personal Consumption Expenditures (PCE) Price Index indicates that U.S. inflation stands at 2.7%, although fewer advisors—just 42%—believe that inflation will remain below 3% over the next year. This represents a sharp drop from the previous figure of 69% in the prior quarter. Additionally, the unemployment rate climbed to 4.6% in November, adding to the general uncertainty about the economic outlook.
Market volatility is another growing concern. Half of the advisors (50%) now anticipate heightened stock market volatility in the next 12 months compared to 2024, up from 42% in the last quarter. Furthermore, the percentage of advisors expressing significant concern about a major equity market downturn increased from 16% to 23%, highlighting a heightened focus on downside risk as they navigate a turbulent market environment.
As the proposed tariffs approach their one-year mark, opinions on the policy landscape remain mixed. More than half (54%) of RIAs believe the Trump administration will positively influence the U.S. economy in 2026, while one-third foresee negative effects, reflecting divergent views on the potential ramifications of government policies. Specific concerns about trade and tariff regulations loom large, with 45% of advisors predicting a negative impact on equity markets in the upcoming year, compared to 26% who foresee a positive effect.
On the other hand, opinions regarding the federal debt’s impact are more subdued, with only 20% of advisors believing it will have a detrimental effect on the economy in 2026. This suggests that immediate market and trade concerns are overshadowing long-term fiscal considerations.
Looking to the future, RIAs are adjusting their strategies to adapt to a more uncertain environment while still seeking growth opportunities. One-third of the advisors have increased their allocations to international equities, indicating a move toward diversification amidst rising volatility. However, advisors are being selective in defensive strategies; only 10% have raised their allocations to annuities with guaranteed lifetime income. Notably, nearly half of RIAs (46%) plan to focus on strengthening existing client relationships in the first half of 2026, surpassing those looking to acquire new clients, which accounts for 29%.
This evidence points to a careful, client-focused approach among advisors as they aim to balance caution with their long-term goals. The insights were gained through a survey conducted by Greenwald Research in November 2025, which involved 100 registered investment advisors across the United States. The research combined both quantitative and qualitative methods to identify key trends within the financial advisory sector.
