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Financial Advisors Respond To The Rise In Recession Talk
All this angst comes as US stocks suffer their sharpest declines in months with the S&P 500 falling into correction territory on Tuesday.
This begs the question as to whether financial advisors are hearing more recession talk as well from clients and co-workers. And if so, are they doing anything to prepare for it?
Melissa Reaktenwalt, founder of EViE Financial Group, part of Rossby Financial, for one, does not see a recession as imminent due to the strength the country’s economic indicators continue to show. By the end of 2025, however, she anticipates much more uncertainty and volatility “across multiple facets, not just economic or financial in nature.”
In the meantime, she has indeed been hearing "recession talk" from clients. In fact, lately it’s been on a daily basis primarily due to her geographic focus in the DC area.
“The doom-and-gloom that one might imagine is happening among federal government and government-adjacent employees is indeed happening on a massive scale, and more and more panicked meeting requests and conversations are flooding in,” Reaktenwalt said.
Along similar lines, Frances Toler, CEO of Toler Financial Group, part of Rossby Financial, sees the economy in remarkably good shape, despite the markets being badly shaken “by the policy uncertainty and chaos coming from the Trump administration.” In her view, recessions are tough to predict, but calling a recession imminent is “quite premature.”
That said, she is absolutely hearing from anxious clients more than usual.
“My clients are very worried right now, and I am taking multiple scared phone calls a day. Top worries include - erosion of civil rights, loss of important Federal programs, job loss, inflation risks from tariffs, and market volatility,” Toler said.
Meanwhile, Tim Harder, Chief Investment Officer at Quotient Wealth Partners, believes economic growth will be lower heading forward, however, he does not believe recession is imminent.
“We are closely watching the employment market and would view a spate of higher jobless claims as an opportunity to reassess. We are having clients realign their allocations based upon the runup of the last two years, focusing less on the recent downturn, and making sure they are not overexposed to equities and more specifically US large caps,” Harder said.
When it comes to his conversations with clients, he said they are more focused on the inflationary impacts of tariffs and not necessarily drawing the dots to recession. As a result, he is adding to short-term TIPS to help mitigate an inflationary spike.
While this uncertainty has spooked markets, the situation is still far too fluid to make any concrete mid-to-long term projections about the economy, according to Sean Dann, director of investment research at Marshall Financial.
“Looking back just a few years, stock market and sentiment declines in 2022 had many convinced a recession was unavoidable, yet we stand here in 2025, and a recession has still yet to materialize,” Dann pointed out.
Moving on, Nathan Hoyt, chief investment officer at Regent Peak Wealth Advisors, believes the economy can be recovering from a recession “before you even know that you are in one,” which would be the base case if a recession does occur in 2025. And while he knows a recession will arrive eventually, he admits it’s a fool’s errand to predict when it will occur.
“Clients don’t typically use the same language as economists, and our clients don’t represent the majority of the country, yet anecdotally I’m seeing the opposite occur – our clients are looking to spend more money this year, in part due to rising costs and in part due to enjoying extremely positive returns over the last 2 years,” Hoyt said.
Finally, Winston Justice, CEO of SageSpring Private Wealth, does not anticipate that a recession will occur before the end of 2025. In his opinion, recessions are typically triggered by “visible systemic imbalances, such as excessive credit extension or a major economic shock,” and while some indicators of stress are present, the broader picture does not currently imply that the economy is on the verge of a classic recession.
“With regard to our clients, we do not observe widespread concerns about an impending recession,” Justice said. “However, there has been a noticeable increase in apprehension about market pullbacks, especially from clients who have recently experienced liquidity events. These clients, now holding substantial cash reserves, are understandably seeking avenues for capital deployment in the market while desiring peace of mind amid the current climate.”
