Sign in Subscribe
Financial services

Registered Investment Advisors' Economic Outlook Index Shows Optimism, Recession Concerns

Strategic Insights

— 2 min read

As the Q2 survey of the RIA Economic Outlook Index indicates, registered investment advisors are becoming more optimistic about the economy, with 6 in 10 expecting inflation to be under 3% in the next 12 months. This trend follows the recent drop in the personal consumption expenditure price index to 2.1% in April, according to the Bureau of Economic Analysis. Despite this positive outlook, advisors remain cautious, with nearly half believing a moderate recession could be in sight.

Key Takeaways:

  • 6 in 10 registered investment advisors expect inflation to be under 3% in the next 12 months, as the recent drop in the personal consumption expenditure price index to 2.1% in April suggests.
  • 45% of RIAs feel more positively about the economy since President Trump re-entered office, while 38% feel more negatively.
  • RIAs with 20+ years of tenure were more likely to feel positive about the economy, with 53% compared to 28% for those with 3-19 years in the business.
  • Almost half of advisors (47%) report increasing allocations to international equities, while three in ten are increasing allocations to U.S. equities.
  • Clients are diversifying their portfolios, with 53% citing increased interest in downside protection solutions like fixed index annuities or other structured products.
  • 47% of advisors believe President Trump's tariff policies are the biggest risk to the economy over the next six months.
  • Geopolitical tensions (40%) and inflation (34%) are also top concerns for advisors.
  • Social Security claims are rising, with May's volume 13% higher than the same period last year, according to the Social Security Administration.
  • 30% of advisors are not making tactical changes to their clients' portfolios, while 33% already have made changes.

Statistics:

  • The RIA Economic Outlook Index increased to 60 in Q2, up 5 points from the previous quarter.
  • 6 in 10 registered investment advisors (60%) expect inflation to be under 3% in the next 12 months.
  • 45% of RIAs feel more positively about the economy since President Trump re-entered office.
  • RIAs with 20+ years of tenure were more likely to feel positive about the economy, with 53%.
  • 47% of advisors are increasing allocations to international equities.
  • Three in ten advisors are increasing allocations to U.S. equities.
  • 30% of advisors are not making tactical changes to their clients' portfolios.
  • 53% of advisors have cited increased interest in downside protection solutions like fixed index annuities or other structured products.
  • 47% of advisors believe President Trump's tariff policies are the biggest risk to the economy over the next six months.
  • 40% of advisors cite geopolitical tensions as a top concern.
  • 34% of advisors cite inflation as a top concern.
  • May's Social Security claims volume was 13% higher than the same period last year, according to the Social Security Administration.

Sources:

1. "Personal Income and Outlays" report, Bureau of Economic Analysis, April 2025 (https://www.bea.gov/news/2025/personal-income-and-outlays-april-2025)

2. Social Security Administration, Monthly Data for Retirement Insurance Applications (https://www.ssa.gov/data/retirement-insurance-online-apps-2012-onward.html)

Read more