* Advisors cite rising volatility, inflation, and

geopolitical risks as top concerns for Q2 2026

* Traditional 60/40 portfolios under pressure amid

simultaneous stock and bond weakness

* Energy, supply chain disruptions, AI uncertainty add

complexity

By Suzanne McGee

PROVIDENCE, Rhode Island, April 1 (Reuters) - Investment

advisors say a buildup of problems is weighing on clients, who

are entering the second quarter of the year struggling with

trying to predict the outcome of war, the direction of energy

prices and the repercussions of problems stemming from private

credit.

An exuberant rally that turned the final trading day of the

first quarter on Tuesday into the best day of the year so far

was not enough to save U.S. market indexes from closing the

period with the worst quarterly returns seen since 2022, as the

Standard & Poor's 500 index recorded a 4.6% loss for the first

three months.

The anxiety reflects a shift in how advisors are thinking

about risk. For years, the standard playbook of diversifying

across assets provided a reliable framework. Now, advisors say,

headwinds are leaving investors with less confidence that

historical patterns will hold.

"Markets can handle bad news," said Mark Stancato of VIP Wealth

Advisors in Decatur, Georgia. "What they struggle with is a lack

of clarity about policy direction and end goals. That's what

we're seeing, not just equity volatility but a broader sense

that outcomes are hard to model."

SIMULTANEOUS STOCK AND BOND WEAKNESS

Both stocks and bonds had a poor first quarter, with yields on

the 10-year Treasury jumping from as low as 4.01% early in March

to highs of 4.44% in the closing days of the month. Even gold

failed to live up to its traditional role as a safe haven, with

its 13% decline in March making the month the worst recorded

since October 2008.

"This is one of the toughest economic/market situations I've

ever seen," said Lisa Kirchenbauer, an advisor at Omega Wealth

Management in Arlington, Virginia.

Intra-day volatility grew in the first quarter, said Jim

Carroll, senior wealth advisor at Ballast Rock Private Wealth in

Charleston, South Carolina, masking the fact that overall,

market declines have been quite orderly.

Matt Dmytryszyn, chief investment officer at Composition

Wealth, a registered investment advisory firm, said he worries

that cumulative headwinds could reshape the psychological

attitudes of high-net worth families, causing them to rein in

their spending, which could take a toll on the broader economy.

There is a risk that growth drivers may stall in this

environment, Dmytryszyn cautioned. If that happens, the economy

and markets will rely more heavily on productivity gains from

the rollout of AI, as well as spending by higher-income

consumers. If either of those falter, he added, "we could see a

two-phase equity market decline, one driven by the fear and

impact of the war with Iran, with a second stemming from a U.S.

economic recession."

The prospect of something just as unnerving but much more rare

-- stagflation, or the combination of high inflation and stalled

economic growth -- has David Haas of Cereus Financial Advisors

in Franklin Lakes, New Jersey, concerned.

"I am not expecting 7% inflation, but it's likely to be

north of 4%," Haas said. Higher oil prices and supply chain

disruptions might cause a slowdown in economic growth. "Not

necessarily recession, but maybe close."

A number find the parallel weakness in both stocks and bonds --

uncomfortably reminiscent of 2022, when both asset classes ended

up in the red and investors found no safe haven -- is another

big concern.

"Simultaneous weakness in both stocks and bonds has exposed

the limits of the traditional 60/40 cushion investors have

counted on for decades," said Jon Ulin of Ulin & Co Wealth

Management in Boca Raton.

Several advisors said the challenge is the number and scope

of issues with which they must grapple.

That uncertainty seems to be taking a toll on clients, said

Kirchenbauer, who is anxious that clients are not responding to

her communications.

"Are they numb, overwhelmed, petrified?" she said.