Advisors are entering the rest of 2026 with a cautiously constructive outlook, even after a volatile start to the year. According to the Spring 2026 Pulse Survey from InspereX, 70% of financial advisors expect the S&P 500 to gain 5% or more by year-end, with sentiment skewing notably bullish: 31% are calling for mid-single-digit returns, while nearly 38% anticipate gains of 10% or higher. The survey was released on April 29, 2026, and captured insights from 783 financial advisors across independent broker/dealers, RIAs, banks, and regional firms.
That optimism is forming against a still-uneven market backdrop. As of early May, the S&P 500 has traded within a relatively wide range this year, underscoring the push-and-pull between supportive fundamentals and persistent macro uncertainty.
At the same time, advisors are clear-eyed about the risks. Geopolitics has firmly taken the top spot as the primary concern for both advisors and their clients, followed by market volatility and evolving inflation expectations. Notably, inflation has moved back into the top tier of risks, overtaking recession concerns compared to late 2025 survey data.
Geopolitics Moves to the Center of the Conversation
Geopolitical risk is no longer a secondary consideration. It’s front and center in portfolio construction discussions. In the InspereX survey, 43% of advisors flagged geopolitics as a top headwind.
At the same time, advisors are not viewing geopolitics purely through a defensive lens. Notably, 31% see geopolitical tensions as a source of opportunity, reflecting a more nuanced approach to global uncertainty.
Taken together, the data suggests a shift in both mindset and messaging. Advisors are increasingly navigating a market shaped by global conflict, trade realignment, and policy uncertainty — while also identifying pockets of opportunity that don’t fit neatly into traditional asset allocation models.
| Rank | Advisor Concerns (Macro Headwinds) | Client Concerns |
|---|---|---|
| 1 | Geopolitics (43%) | Geopolitics (45%) |
| 2 | Market Volatility (17%) | Market Volatility (35%) |
| 3 | Inflation (16%) | Inflation (9%) |
Demand for Downside Protection Gains Momentum
As uncertainty persists, advisors are leaning more heavily into strategies designed to manage drawdowns. More than half (54%) of InspereX respondents said they are increasing their use of downside protection.
Importantly, those strategies are not just mitigating risk — they’re helping keep clients invested. Nearly 39% of advisors said downside protection is the key reason assets are staying in the market rather than moving to cash, reinforcing its role as both a portfolio tool and a client retention mechanism.
Investor preferences are moving in the same direction. VettaFi data shows that 66% of investors favor downside protection ETFs over leveraged or inverse strategies, underscoring a clear preference for risk management over return amplification.
At the same time, product innovation is evolving to meet that demand. Laddered outcome strategies — particularly structured protection ETFs — are gaining traction as a way to address path dependency in volatile markets. By spreading exposure across multiple entry points, these strategies aim to smooth outcomes and reduce the timing risk embedded in single-outcome approaches.
Artificial Intelligence Investing Narrative Shifts Toward Execution
While AI remains a key opportunity — cited by 28% of advisors in the InspereX survey — the conversation is becoming more grounded.
Rather than focusing solely on long-term potential, advisors are increasingly looking at where AI is already driving tangible returns. According to VettaFi, that includes the buildout of physical AI — the infrastructure layer powering the technology, such as semiconductors and data centers.
At the same time, the opportunity set is broadening. AI is beginning to influence a wider range of industries through automation, reshoring, and productivity gains. That dispersion is creating a more nuanced landscape where active managers may be better positioned to identify mispricing as the market recalibrates.
A More Tactical Approach Takes Hold
Against this backdrop, advisors are becoming more proactive in both client engagement and portfolio management. The InspereX survey found that 31% are increasing client outreach, while 12% are stepping up tactical rebalancing.
This shift is also reflected in growing interest in active ETFs. Unlike passive strategies, which remain tied to index exposures, active ETFs offer flexibility to adjust positioning as market conditions evolve — an advantage in periods of heightened volatility.
Advisors are also keeping a close eye on macro crosscurrents, including a weakening U.S. dollar and the normalization of monetary policy in Japan. The unwind of the yen carry trade, in particular, is emerging as a potential source of volatility that requires more active oversight than a traditional 60/40 approach.
How Advisors Are Repositioning for 2026
Across these trends, one theme stands out: Adaptability is increasingly central to how advisors build and manage portfolios. Geopolitics is reshaping risk frameworks in real time, downside protection is moving from a tactical tool to a core allocation, and AI is evolving from a thematic story into a more practical, earnings-driven opportunity set.
For advisors, the takeaway is less about finding certainty and more about managing uncertainty. In a market defined by shifting macro regimes and uneven returns, the ability to adjust may prove just as important as diversification itself.
Originally published by Advisor Perspectives
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