Economic turbulence has seen advisor-managed funds ebb and flow towards different asset types over the last year or so. According to new data from Financial Planning’s Financial Advisor Confidence Outlook (FACO), a survey of financial advisors and planners that measures confidence in the economy and other factors, some investment vehicles have fared better than others.
Since President Trump first announced his tariff policies in April, which saw market outlook tank at an all-time low of minus-24, advisor sentiment has improved drastically to this month’s benchmark of minus-three. The all-time high followed in the wake of Trump’s successful reelection to the White House last November, pushing the score to plus-24.
With new regulatory variables for cryptocurrency, a modern-day gold rush and a record-setting $7.7 trillion in money market cash investments, advisors are rethinking portfolio allocations to close out 2025 and kick off 2026.
Stocking up on the right assets for clients
Looking at monthly FACO data from January to date paints a clear picture of how advisor sentiment has shifted according to policy moves and market volatility.
Domestic equities (stocks and stock funds) were the most popular investment assets among advisors in January, with 42% responding they planned to increase portfolio allocations for this class across the funds they manage. Impact/ESG funds were the least popular at 18%.
This month, the domestic equity category fell. Only 25% of advisors planned to add equities to client portfolios. More popular were foreign equities (stocks and stock funds) at 33%, bonds and debt-based securities at 27%, and other alternative investments (real estate, securities-based loans and fungible assets) also at 27%. Impact/ESG funds remained at the bottom with 10%.
For a brief period in March, spurred by mounting worries over tariff promises from Trump during his early days in office and other economic downturns, cash was king for 34% of advisors moving their portfolios towards that asset class.
Experts such as Peter Crane, the president of Crane Data and the publisher of the Money Fund Intelligence newsletter, said warnings about cash incorrectly imply that investors only consider two distinct investment vehicles such as stocks and money markets when it comes to placing cash in the option that has the best yields.
“Money markets are going to continue taking market share from bank deposits, and not stocks, because the yields on bank deposits still suck,” Crane told Financial Planning.
Moving away from cash
Cash has mostly remained the top asset advisors are moving their portfolios away from in 2025, from 32% of respondents who said they would decrease their allocations in January to 31% this month.
The assets least likely to see decreases have been a mix of foundations, endowments and charities (ranging from 3% to 9%), other alternative assets (3% to 6%) and digital assets (3% to 7%).
In April, when Trump’s tariff plans became more concrete, advisors were most likely to pare down portfolio distributions of domestic equities (stocks and stock funds), according to 29% of respondents. Other assets like cash, impact/ESG funds, foreign equities (stocks and stock funds) and education saving vehicles (e.g., 529 Plans) saw subsequent decreases in advisors decreasing holdings of these assets.
Even with the U.S. stock market continuing to record strong performance, wealth management professionals are recommending that clients avoid becoming too comfortable, else they miss out on alternative growth opportunities.
Doug Huber, deputy chief investment officer at the large RIA Wealth Enhancement Group, told FP that some clients are becoming interested in what lies beyond the standard view of stocks and bonds.
“I do believe the majority is certainly in the camp of, ‘Hey, this is working. This is great. How could you possibly beat this?,” Huber said. “But I would also add that there is definitely a subset of clients that are taking the other side of that trade, whether they are thinking about it in the full context, or just saying, ‘Hey, I’ve got enough of this. Give me something else.'”
