The tariff announcements spared almost no one last week — not even those adorable little penguins on uninhabited Heard and McDonald islands.

But as the dust began to settle over the weekend, advisors started contemplating what a prolonged trade war might mean for client portfolios. Sure, advisors are in it for the long haul and timing markets especially around politics can be dicey. But the levies could be in effect for the better part of a presidential cycle, and that could wreak havoc on savings, especially for clients entering or newly in retirement. With fewer years left to wait out downturns, retirees could struggle to protect their nest eggs in the short term, and that could have lasting long-term impacts, according to a study by JPMorgan.

“I had one client reach out with concerns, but most are holding steady,” said Brenna Baucum of Collective Wealth Planning in Salem, Oregon. “I’m proactively working with clients who have excess cash, especially those dollar-cost averaging into the market.”

Chevy to the Levies

She and other advisors are beginning to put the altered economic picture into perspective. The S&P 500 opened down more than 3% on Monday and had market-watchers on a rollercoaster through the trading day, fluctuating from partial gains to below bear-market levels at times. According to an analysis by Bloomberg:

• Some $9.5 trillion in wealth was wiped out globally through the weekend.
• The bond market was also careening Monday, with 10-year yields climbing 12 basis points following earlier tumbles.

After some hand-holding, clients are also settling into the new economic reality. Baucum reminded one worried client that they shifted required minimum distributions into cash in January, which offered some “peace of mind” and room to ride out the volatility. In fact, Baucum said the client decided to give to a favorite struggling nonprofit. Now that a major drawdown has come, there may be more clarity — and less volatility — in the months to come. (We said maybe). And don’t rule out buying last week’s massive dip, either, Baucum said.

“If there’s advice to offer, it’s this: Tariff-driven pullbacks may be temporary, but if you’ve got long-term money sitting on the sidelines, now’s the time to make that money start working,” she told Advisor Upside. “We’re not market-timers, but we are opportunistic.”

Everything in Moderation. A major problem is that while the S&P 500 is down significantly from February’s all-time highs, the impacts on households’ wealth are much more pronounced than in previous pullbacks, said Thomas Van Spankeren of Rise Investments in Chicago. That’s because household equity exposure as a percentage of financial assets is at record levels, leaving clients at the mercy of stock market fluctuations. An emphasis on diversification has led to less volatility for his clients this year, Van Spankeren said.

“Educating clients not to be over-concentrated in one segment of the market is sound advice — especially now,” he told Advisor Upside.

Wealthtech funding is heating up, and a global market meltdown may simply add fuel to the fire.

Worldwide, the total wealthtech market is expected to reach almost $9.5 billion by 2028, according to data from Research and Markets. The latest example of firms cashing in on that demand is asset management platform Ethic, which closed a $64 million round last week. Led by State Street Global Advisors, the funding will go toward building out Ethic’s accounts and model portfolios, and a partnership with State Street will focus on automating more features for advisors.

It’s a substantial funding round, led by the fourth-largest asset manager in the world, and speaks to the overall health of the booming wealthtech sector after a strong 2024. “It’s very much having a moment, especially as the advisor space continues to grow and more advisors look to go independent to provide differentiated client experiences,” said Ethic CEO Doug Scott.

Tech Stacking Up

One of advisors’ top concerns when it comes to building out their tech stacks is how new platforms can help navigate volatility, Scott told Advisor Upside. “We got a particularly big example of that last week,” he said. “Markets are moving a lot, so having a more efficient way to integrate capabilities like tax loss harvesting in this kind of environment is important.”

Additionally, clients are demanding more customization when it comes to how their assets are managed. One portfolio doesn’t fit all, and wealthtech platforms can provide advisors with customization options at scale, Scott said. “Clients want more choice, control, and influence,” he said. Ethic currently manages more than $6 billion in assets across some 250 firms, including RIAs and institutional clients.

Wealthtech on a Tear. Just last month, digital estate planner Trust & Will landed $25 million in funding, led by Modern Ventures. And 2024 was a healthy year, too, for funding rounds focused on wealth managers:

• Digital financial planning firm Facet raised $35 million in October.
• Farther, a startup wealth management firm, secured $72 million that same month.

“It’s a signal around the strength of what’s happening in the wealth ecosystem,” Scott said of all the funding.

Clients might want a bit of that Midas touch after last week.

Gold is one of the most precious metals on Earth, but given the volatile financial markets as of late, element No. 79 on the Periodic Table is looking even more appealing. The sweeping tariffs that were announced by the US on April 2 rocked equity markets and left many clients feeling a bit uneasy about their portfolios. But gold hit an all time high of more than $3,100 per ounce last week.

With higher prices on everything from cars and coffee to beer and bananas on the horizon, gold can add some diversification, said Joy Yang, head of index product management and marketing at MarketVector. “Gold is always a good place to be if investors are looking for a store of value over the long term, but it shouldn’t be 100% of your core holdings,” she told Advisor Upside.

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