What It Is: A predictive tool created to measure the expectations of Registered Investment Advisors (RIAs) for the upcoming year's economy and market movements.
How It Works: The index is based on responses to five critical questions related to key economic indicators such as the S&P 500 performance, inflation rates, recession probability, market volatility, and potential equity market downturns from over 100 RIAs around the country.
Key Insights
- Index Score and Sentiment: The overall sentiment among RIAs held steady this quarter, with the index landing at 55. Hybrid RIAs continue to feel more upbeat with a score of 61, while pure RIAs are a bit more reserved at 52. Overall, advisors seem to be staying optimistic, but with a realistic view of the market.
- Market Performance: Nearly 60% of RIAs expect the S&P 500® to grow between 3% and 9% over the next year. While expectations have dialed back slightly from the highs of last year, most advisors still see room for steady growth.
- Inflation Expectations: Just over half of RIAs think inflation will land between 3.0% and 3.9% in the next twelve months—a small increase from last quarter. While inflation is definitely on their radar, most don’t expect it to spiral out of control.
- Recession Probability: Confidence in the economy is growing. Seven in ten RIAs believe a recession is unlikely in the next year, a noticeable jump from the end of 2024.
- Volatility and Downturn Concerns: 62% of RIAs expect more market volatility this year, and about 1 in 5 are highly concerned about a major downturn. Those numbers are up a bit from last quarter, but overall, most advisors are still feeling steady—just keeping an eye out for potential bumps ahead.
Why It Matters:
- Strategic Planning: Offers an early signal of potential economic shifts, aiding in better strategic planning for RIAs and their clients.
- Advisor and Client Confidence: Reflects a collective stance of cautious optimism, providing reassurance in the face of potential market challenges.
Download a visual overview of the RIA Economic Outlook Index, which measures Registered Investment Advisors’ (RIAs) economy and market trends expectations. | 
Download the RIA Economic Outlook Overview, which provides insights into Registered Investment Advisors’ (RIAs) expectations on key economic factors, including market performance, inflation, and recession risks for the upcoming year. |