Advisors upbeat on economy but worry about policy risks

The Center for Retirement Research at Boston College released a report, sponsored by Jackson National Life Insurance, based on an independent July survey by Greenwald Associates of 1,400 U.S. adults aged 45 to 79 with at least $100,000 in investable assets and 400 financial advisors who manage at least 75 clients.

The survey found a gap between advisors’ and investors’ short-term economic views. When asked whether the economy had grown weaker, stronger or stayed the same since the start of 2025, 53% of investors said it had weakened, compared with 25% of advisors. Conversely, 47% of advisors said the outlook had grown stronger versus 26% of investors. Investors were more likely to say future government actions would weaken their finances (47% to 24%); 31% of advisors thought government actions would hurt clients while 36% expected positive effects.

Advisors reported concern about specific policy risks: 87% cited federal debt levels, 79% cited possible inflation spikes, 72% cited rising Medicare costs, 67% cited tariff changes, 65% cited potential reductions to Social Security benefits and 63% cited a stock market decline.

The report lists actions advisors recommended in the first half of 2025. Only 11% advised clients to delay retirement, 21% recommended cutting spending, 42% suggested tax-motivated investment reallocations, 43% recommended hedging vehicles and 49% advised altering investments. Regarding portfolio stance, 36% of advisors said they recommended no change, 25% advised reducing risk, 18% recommended taking on more risk and 21% reported no clear pattern.

Investors also took defensive steps: about one-third shifted to more conservative portfolios, 28% boosted emergency savings and 21% postponed retirement. More than 60% of investors said their confidence that the federal government would pass laws to benefit Americans fell during the first half of the year.

The report’s regression analysis found little measurable impact from having a financial advisor on changes in investors’ concern about their investments or their financial future; the correlations were statistically insignificant.

The authors, Center for Retirement Research Senior Advisor Alicia Munnell and Associate Director of Health and Insurance Gal Wettstein, wrote that advisors display “frothy optimism at a high level, coupled with fundamental concern about the implications of policy on financial security.” Financial behaviorist Jacquette Timmons noted advisors can acknowledge clients’ fears and explain how financial plans build in flexibility to respond to policy uncertainty.