Market Downturn? Here’s How a Financial Advisor Can Help

1. They Steer You From Emotional, Fear-Driven Decisions

It’s human nature to want to “do something” when markets drop. But impulsive moves, like pulling everything out of stocks or jumping into speculative bets, often do more harm than good.

A good financial advisor acts as a buffer between your emotions and money. If your instincts tell you to sell, an expert can remind you that downturns are temporary and help you stay on track.

When the markets take a hit, an advisor may:

• Revisit your long-term goals to reinforce why your plan exists.
• Illustrate how previous downturns played out and how recovery tends to happen.
• Keep you focused on what you can control: your risk, cash flow, and time horizon.

A cool head during volatility isn’t easy to maintain. An advisor helps you keep yours.

2. Smart, Tactical Portfolio Adjustments

Downturns don’t always call for action, but a financial advisor can help you know when to make changes. This includes:

• Rebalancing your portfolio while prices are low.
• Harvesting tax losses to offset gains elsewhere.
• Shifting your cash reserves to meet short-term needs without selling at a loss.

They also ensure you’re not making costly mistakes, like selling during a dip to fund living expenses, or missing required minimum distributions (RMDs) that carry penalties.

Small, strategic decisions can help preserve and build long-term wealth. But the key is knowing which of them matters and which to ignore—something a qualified advisor can guide you through.

3. Communication When It Matters Most

During market turbulence, silence from your advisor can feel like abandonment.

The best financial advisors don’t wait—they call right away. They explain what’s happening in the markets, what it means for your plan, and what (if anything) you should be doing differently.

Unless you’re a seasoned investor laser-focused on your long-term plan, seeing markets swing will likely stir up uncertainty. An advisor’s expertise and support help you regain clarity and stay the course.

4. Protecting Retirees’ Income During Downturns

If you’re already retired or close to it, a market drop can seriously impact your long-term goals. How much income you can safely withdraw and how long your money lasts may take a hit.

A financial advisor can help you:

• Create a “bucket” strategy for income, separating near-term cash needs from long-term investments.
• Time your withdrawals to avoid selling during a dip.
• Strategically manage RMDs, pension income, and Social Security.

They also factor in risks unique to retirees, like inflation, longevity, and healthcare costs. During a downturn, safeguarding your withdrawal plan is just as important as protecting your investments.

5. Focusing on the Big Picture

Downturns can feel all-consuming. But beyond what’s happening this month or year, an advisor gives you the perspective to zoom out and see the full arc of your financial life.

They remind you:

• Your goals haven’t changed, even if the market has.
• Volatility is normal.
• Long-term investing works if you stay disciplined.
• You’ve planned for these moments.

Ultimately, staying on track is more about sticking to your long-term goals than reacting to market changes. A financial advisor can help keep you poised and prevent unnecessary mistakes.

Should You Hire a Financial Advisor?

If you’re anxious about market volatility or unsure what moves to make, a financial advisor can help provide clarity and calm. You may benefit from speaking with an advisor if you’re:

• 10–15 years from retirement and worried about protecting your nest egg.
• Already retired and want to make your income last.
• Managing over $250,000 and want more strategic guidance.

Not all advisors are created equal. Look for a fiduciary—someone legally obligated to act in your best interest—and prioritize professionals with reputable credentials like Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC).

Get Matched With a Fiduciary Advisor

To make it easier, we offer a free matching tool that connects you with a vetted fiduciary financial advisor based on your location and needs. It only takes a few minutes to get matched with a qualified professional who can help you build a smart financial plan.