The adviser’s burden: building financial resilience in an age of uncertainty

This month’s In Focus campaign explores how advisers can help clients build and maintain financial resilience in a time of economic uncertainty, market volatility, and increasing day-to-day financial pressures. We will look at the practical role advice can play in helping people feel more secure, better prepared, and more confident about their financial future.

Ben Gilbert, MPS Portfolio Manager at Sarasin & Partners, looks at how advisers can support clients in a more fragile and demanding financial landscape, where resilience, realism and long-term discipline matter just as much as pursuing returns.

For a long time, financial planning rested on a fairly comforting assumption: that with enough discipline, structure and time, uncertainty could be reduced to something manageable. That assumption looks far less convincing these days.

The world that advisers and clients now live in is more fragile and more demanding. Inflation has proved more persistent than expected. Markets are more prone to sudden bouts of volatility. People are living longer, often with more complex financial needs in later life. Most significantly, the long shift from defined benefit to defined contribution pensions has changed the very nature of retirement itself. Responsibility for funding later life has moved away from institutions and onto individuals, along with much of the associated risk.

That one change has profound consequences. In the defined benefit era, clients could build their plans around the idea of a reliable income stream, sometimes with inflation linkage, that would continue for life. In the defined contribution world, that certainty has gone. Clients are no longer receiving an income that has been engineered for them. They are trying to engineer it themselves, through a combination of savings, investment returns and withdrawal decisions that must somehow hold up over an unknowable number of years.

This is why the adviser’s role has become more important, not less. The challenge is no longer simply to help clients accumulate capital or improve returns; it is to help them build financial resilience.

That distinction matters. A portfolio can look effective in favourable conditions and still prove fragile when it matters most. Retirement planning today demands something more robust. It requires portfolios and strategies that can withstand adverse markets, rising prices, changes in spending needs and the reality that retirement may last far longer than earlier generations expected.

From an investment perspective, that means starting with a simple truth: risk cannot be eliminated. It can only be understood and managed. In retirement, that risk comes in several forms at once. There is sequencing risk, where poor market returns early in retirement can do lasting damage. There is inflation risk, which steadily erodes spending power. There is longevity risk, which raises the possibility of clients outliving their assets. There is also liquidity risk, which becomes especially important when clients need to draw income regardless of market conditions.

A resilient plan acknowledges all of this. It does not rely on favourable assumptions or smooth outcomes. It is built to function under pressure.

That has clear implications for portfolio construction. Diversification remains central, but it has to be more than a familiar principle repeated by habit. It should reflect a deliberate balance between growth, defence and assets with the potential to deliver returns in real terms. Growth assets remain essential because clients need their capital to keep pace with inflation over long retirements. Defensive assets play an equally important role by helping provide stability and a source of liquidity when markets fall. Real assets can also contribute, particularly in an environment where inflation is not a brief disturbance but an enduring threat.

Inflation deserves particular attention because it is often underestimated until the damage is already visible. For clients without inflation-linked pension income, the erosion of purchasing power can become one of the greatest risks to long-term security. Advisers therefore have to think in real terms, not merely nominal ones. The question is not just whether a client can draw an income, but whether that income will still support their lifestyle years from now.

Structure matters just as much as allocation. Liquidity, in particular, is often underappreciated. Clients who are forced to sell growth assets during periods of market weakness in order to meet short-term spending needs can lock in losses unnecessarily. Holding a dedicated reserve of cash or near-cash assets can help prevent that. In practice, a liquidity buffer covering around two years of expected withdrawals can provide both practical flexibility and emotional reassurance.

That last point matters because this is not only an investment challenge. It is a behavioural one. Clients experience volatility emotionally, not academically. They feel uncertainty in a very human way, especially when headlines are unsettling and online commentary offers easy answers to difficult problems. At such moments, the adviser’s value extends well beyond technical competence. It lies in providing perspective, discipline and reassurance when confidence is under strain.

That is where trust grows. Not during the good times, but in the difficult times.

In a world where clients carry greater responsibility for their retirement outcomes, the value of thoughtful advice rises accordingly. They are not looking for certainty because certainty is no longer on offer. What they want is confidence that their plan is robust, their portfolio is appropriate and their adviser is helping them prepare for an uncertain future with realism and care.

That, increasingly, is the burden of advice, and perhaps its greatest value too: giving clients the confidence that their plans are robust, their portfolios are purposeful and their choices are based in discipline rather than fear even in an uncertain world.

By Ben Gilbert, MPS portfolio manager at Sarasin & Partners