What Role Do Wealth Managers Play Amid Economic Uncertainty?

Uncertainty goes with the territory when it comes to the financial and investment markets. But 2025 has seen especially high levels of market volatility. Investors this year have had to weather a wide range of economic shocks, from tariffs and trade to taxes and inflation. 

Fast-traveling news and even misinformation can influence markets quicker than ever, leaving many investors feeling nervous and uncertain. This presents a unique opportunity for community bank wealth managers to help their clients remain calm during turbulent times.

Turbulence past and present

Dirk Gasterland, CEO of $550 million-asset Coulee Bank in La Crosse, Wisconsin, says the biggest concern the community bank’s wealth managers are hearing about from clients is uncertainty about their retirement finances. 

“With all the volatility and turbulence, many clients are wondering if they’re going to have enough money to retire comfortably,” he says.

At $27 billion-asset WesBanco in Wheeling, West Virginia, all the talk of tariffs has some clients on edge. “I think this is because tariffs can feed into other issues from an economic standpoint, such as inflation and economic growth,” says Scott Love, WesBanco executive vice president and director of wealth management. “And tariffs have been in the news headlines all year long, which can stoke fear and anxiety.”

During times like this, it’s important to remind clients that uncertainty and volatility are normal parts of investing. According to First Trust Advisors LLC, between 1942 and 2024, the United States has experienced 15 bear markets, which are periods where the S&P 500 Index “closes at least 20% down from its previous high close, through the lowest close reached after it has fallen 20% or more.”

Love cites several examples, such as bear markets that occurred during the COVID-19 pandemic, the subprime mortgage crisis and subsequent Great Recession in 2008 and 2009, and the dot-com crash from 2000 to 2002. After each of these downturns, the markets bounced back stronger than ever.

“Wealth managers can play an important role during these times by helping clients stay focused on their long-term financial goals and not get sidetracked by short-term market dislocations,” Love says.

Avoiding the behavior gap

Love points out studies demonstrating a “behavior gap” between returns realized by the average investor and returns of the S&P 500 Index. For example, the average equity investor earned 16.54% in 2024, while the S&P 500 returned 25.02% last year, according to the latest DALBAR Quantitative Analysis of Investor Behavior report. This 8.48% performance lag was the second-largest behavior gap of the past decade.

“There will always be periods of short-term market volatility,” says Love. “It’s up to wealth managers to help clients avoid making emotional decisions based on this volatility that could negatively impact their long-term financial goals.”

“When there’s market turbulence, the natural reaction often is to react and do something,” says Gasterland. “But in most cases, the better course of action is to sit tight and not make a rash decision based on emotions. From this perspective, the wealth manager’s job is just as much psychological as it is financial or investment related.”

Keep communication lines open

Communication is especially important during turbulent times. “If you normally meet with clients annually, move to a semiannual or quarterly meeting schedule,” says Gasterland. “This will enable you to make subtle adjustments if necessary and can give clients greater peace of mind.”

Start meetings by reviewing investment objectives and long-term goals. “Is the client on track to meet their goals despite short-term volatility?” says Love. “Reminding them of the need to stay focused on the big picture can remove some of the uncertainty and anxiety they’re feeling.”

Gasterland likes to remind clients of what he calls the “3 Cs” of investing: clarity, calm and confidence. “If you have clarity, this will produce a sense of calm,” he says. “And when you’re calm, you can be confident about the investing decisions you make going forward. You won’t be as tempted to make rash decisions and chase returns during a time when the markets aren’t conducive to doing so.”

The good news is that community banks can be especially well-positioned to help clients through times of market turbulence. “We live and work right alongside our clients, which strengthens our connection with them,” says Love. “We have worked with some of our clients for three or four generations, so they know we’ll be here with them for the long term, not just the next six months.”

Gasterland concurs: “[Coulee Bank’s] wealth managers don’t work in the financial districts of New York City or Chicago; they’re right here in the community. This local connectivity can give community banks an advantage over large national and regional banks during turbulent economic times.”