Study highlights how advisers help restore perspective and keep clients focused on long-term goals during periods of uncertainty

Morningstar’s latest behavioural research shows that while market volatility doesn’t necessarily trigger investor panic, it does narrow attention - often causing clients to fixate on recent market movements, view dramatic headlines, and contemplate whether they should act immediately. This shift in focus can materially influence how investors perceive and engage with their portfolios, often to their own detriment.

The findings were presented by Ryan Murphy, Global Head of Behavioural Insights at Morningstar, at the Investment Forum in Cape Town and Johannesburg, where he also held exclusive sessions with Morningstar clients on how advisers can better support investors through turbulent and uncertain periods.

“Periods of market volatility do not just test portfolios - they test resolve and investing discipline,” said Murphy. “The opportunity for advisers is not only to explain what is happening in markets, but to help clients step back, restore their perspective, and reconnect with the long-term purpose of their investment plan.”

Morningstar’s study, How Financial Advisers Can Support Clients Through Market Volatility, drew on insights from financial advisers across six countries - the UK, US, Canada, Australia, South Africa and India - who reflected on their experiences during bouts of volatility.

Key Findings

• Advisers initiated volatility-related conversations 58% of the time, underscoring their proactive role.
• Clients most frequently asked about the causes of volatility, their portfolio performance, and potential impacts on their financial security and lifestyle.
• Clients rarely raised investing opportunities or long-term goals, highlighting an opportunity for advisers to broaden the frame of the conversation, including fostering a contrarian viewpoint in the face of potential market overcorrections.
• 73% of advisers reported using at least one behavioural coaching tactic, with early indications that these clients behaved more opportunistically during volatile periods.

A repeatable process matters

The research points to the value of a structured, repeatable process for volatility conversations - one that combines market education, decision-making support, and consistent communication before, during and after periods of market strain. Advisers reported using graphs, slides, and other visual tools to help clients understand the long-term nature of markets and the benefits of staying invested.

View Morningstar’s full behavioural research report on “How Financial Advisors Can Support Clients Through Market Volatility” here.