Financial markets are responding with doubt and concern as tariffs take effect and further tariff plans are announced. If your clients haven’t expressed concerns or asked for your views about this yet, there’s a good chance that they soon will.
To gain a deeper understanding of the how tariffs are affecting clients and the investing landscape, we reached out to Matt Regan, CEO and President of Wealthcare, and Ron Madey, its Chief Investment Officer. Madey addresses the current state and potential outcomes of the tariffs, while Regan explains how to guide clients through the uncertainty.
Ron Madey, CIO, Wealthcare
The administration has launched multiple rounds of tariff experiments, initially imposing steep import taxes on our country’s closest trading partners with the stated goals of addressing illegal immigration and drug trafficking. As they move on to metal and reciprocal tariffs, the messaging turns more to fair trade, protecting U.S. industry and bringing manufacturing jobs home. However, a foundational motivation is using tariffs to generate revenue to offset tax cuts.
The strategy hinges on testing whether these tariffs can stick without significant retaliation. Early responses suggest otherwise. Canada, Mexico, China and the European Union have signaled countermeasures.
This fight might not escalate as the administration has already delayed imposing some tariffs, indicating a possible preference for negotiation. China remains the most politically convenient target due to its adversarial stance.
This is just the beginning. The administration views tariffs as a long-term solution to replacing income tax revenue. Treasury Secretary Scott Bessent argues that tariffs might generate $2.5 to $3 trillion to offset the projected $4.6 trillion cost of proposed tax cuts over a decade. However, historical precedent, like the Smoot-Hawley Tariff Act of 1930, warns of potential economic consequences. That tariff hike triggered a global trade war, devastating American exports and exacerbating the Great Depression.
“One thing is sure: Market volatility is here to stay.”
Whether these experiments will be better managed remains to be seen, but one thing is sure: Market volatility is here to stay.
Matt Regan, CEO And President, Wealthcare
Market uncertainty is inevitable, but how you communicate with clients during these periods makes all the difference. With new tariff proposals on the table, investors may be concerned about potential economic impacts. Instead of waiting for calls, proactively engage clients with clear, confident guidance.
Be proactive and reassuring. The tariff proposals are triggering market volatility and your clients will likely have questions about how it affects their investments. Reaching out first with insights shows that you’re monitoring the situation and thinking ahead on their behalf. A proactive approach builds trust, while a reactive approach ensures personalized responses to specific concerns. A balance of both is key.
Use the right resources. Help clients separate headlines from financial realities by leveraging your planning tools and market research. Advisors have access to a variety of tools and resources to empower client care. For example, the right financial planning platform can help advisors keep their clients focused on their progress toward their retirement goals instead of fixating on specific numbers or market peaks and troughs.
Similarly, an expert investment committee can provide insights and analysis on market trends and influences. If tariffs affect certain sectors, discuss diversification strategies to manage risk.
Trade policy shifts can be complex and clients may react emotionally.
Minimize emotional response. Trade policy shifts can be complex and clients may react emotionally. Listen carefully to their concerns and acknowledge their anxieties before offering perspective. Explain how tariffs could impact specific industries, supply chains or inflation, but remind them that investment strategies should be based on long-term goals rather than short-term market swings.
Stay focused on the numbers and use your financial planning tools to simulate different scenarios for your clients. Remember, your goal is to help them prepare for their futures and manage their finances so they can lead the life they want to live, now and later.
Remember the long game, if it applies. Investing is a long game. If history shows us anything, it’s that markets go up and markets go down. Despite the peaks and troughs of economic cycles, investors make returns. The S&P 500 has delivered an average annual return of 6.37% (adjusted for inflation) since 1957. For clients planning to retire in the next five years, you may need to take a more proactive approach to managing their portfolios and expectations to help them meet their goals.
Share information. Clients don’t need every technical detail, but they do need to understand how potential tariffs could impact their portfolios. Providing clear, digestible insights — rather than letting them rely on news headlines — helps them feel more in control.
“Clients don’t need every technical detail, but they do need to understand how potential tariffs could impact their portfolios.”
Propose potential strategies. For clients whose plans may be directly affected, explore actionable strategies. If the numbers and projections indicate that a client might not have the retirement savings they’d hoped for, it’s time to discuss strategies to help them get back on track. This could involve shifting to a more conservative or protective portfolio model, adjusting their current contributions, or discussing a change to their proposed retirement date.
Final thoughts. Advisors don’t need to predict the future; they need to help clients navigate it. Lean on your investment team for up-to-date analysis and be ready with clear, level-headed guidance. The more informed you are, the more confident your clients will be in their financial future.
Janeesa Hollingshead, Contributing Editor at Wealth Solutions Report, can be reached at editor@wealthsolutionsreport.com.
