Over 100,000 advisors will leave the industry by 2035. How many are exiting because of the stress from unrealistic client expectations?

Self-induced panic and uncertainty—along with the allure of adrenaline for thrill seekers—find their home with roller-coaster riders and investors chasing “rocket ship” highs in the market. “Unwise” would be the appropriate term for such investor expectations.

Waves of investors are seeking the next AI boom, acting on a friend’s biotech tip before it takes off, or lining up early for a new investment. The magnetism is undeniable. The exhilaration of the newest tech trend plays with investor emotions. If it were mere speculation, this would be an easier expectation to curb.

This isn’t a cryptocurrency or alt-finance opportunity cloaked as an investment. No, these are publicly traded securities with titan-sized funding pouring billions into R&D. Investors of all makes and models see this raging bull market as an early gold rush. Whether that proves true will be revealed in the coming months or years. The reality is that more investors expect this upward trajectory to continue, with no decline in sight.

Intelligent, seasoned advisors such as yourself are caught in the crosswinds of these expectations. How did we reach this point? What’s truly driving this shift in investor sentiment? Is there a better way to manage investor expectations, especially from an actively managed approach?

Investor expectations, fee compression, and forgetful bulls

McKinsey & Co. reported in February 2025 that approximately 110,000 advisors are expected to no longer be advisors by 2035. Why the exodus?

I connected one-on-one with more than 1,500 financial advisors over the past 18 months. My goal was to understand what’s leading advisors to exit the industry at such an alarming rate.

The top two reasons—age and technology disruption, specifically AI—aren’t the focus here. The third-biggest reason is the frustration (and occasional friction) created by elevated investor expectations. Investors expect more robust service, faster response times, better technology, and more accessibility to and from advisors than ever before.

This convergence of expectations and technology is leading to greater fee compression. Investors expect more extensive, faster service from advisors while simultaneously expecting to pay less. If an investor is paying 1% on a $1 million account, it’s tempting to wonder, “Could I do the same or better without paying $10,000 every year?”

Investors now have access to real-time market analysis, breaking news, and a glut of investor-focused content across every social media platform. The mere presence of information gives investors the mirage of reliable data and insight. What they see, though, isn’t always real.

Many investors hold the misconception that fast-rising investments in nearly every sector signal that these market conditions will last indefinitely. In truth, these investment trends are simply signs of this raging bull market. The problem with bulls is forgetfulness. Bulls forget how quickly high-risk investments can lose value compared with how quickly they gain it.

Yet each week, advisors from multiple states confide in me that they’re struggling to manage investor expectations given these conditions. The source of these concerns lies in what often drives investor emotions.

What investor expectations say about emotional competence

Yes, investor clients want good returns. What they likely want just as much is reassurance. What does that look like?

It may show up as a question: “Why didn’t we get into that AI play earlier?” What that sentiment really means is, “I’m not confident we’re doing enough with our investments. What more could we be doing?” The underlying uncertainty quietly whispering in the investor’s mind is, “Are we going to be OK? I don’t want to miss out.”

Emotional competence, or the lack of it, is at the root of this cognitive dissonance. In advisor Mike Freemire’s book “The Full Financial Framework,” he outlines the distinction between emotional intelligence and emotional competence. Emotional intelligence, dare I say, is relatively self-serving, despite what 10-pound textbooks and tenured psych professors may say. Controlling our emotions benefits us first and foremost.

Emotional competence, on the other hand, is about putting yourself in the other person’s shoes to see how your perspective, emotions, and words may affect their outlook. Investors need to recognize how emotionally charged decisions also affect the financial future of others who rely on them, such as their children.

Emotional competence—and, in many cases, emotional intelligence—is often hamstrung by money stories and financial trauma. These stories are powerful:

• Did their parents lose everything in 2008, including the family home or their kids’ college funds?
• Did their retirement plan unravel overnight?
• Are they suffering a gut punch of regret after staying with the wrong investment for too long?
• Did they exit the bear market in 2008–2009 with a huge loss and never truly regain their confidence as an investor?

What past experience is driving this particular investor to raise concerns? It’s often not an investor’s fault, but it is their responsibility—and your opportunity as a proactive advisor. Dig into this source. “What’s the real concern?” is often an excellent conversation starter. Market timing is rarely the real issue. Is this about why we didn’t catch this high before now—or is it about not repeating a past experience?

Your inner voice may be raising this fear: “What if I lose clients by being this direct?” If that happens, then you spared your mind, time, and future by parting with a client who’s likely the wrong fit. Would you rather make more revenue at the cost of your professional sanity? That’s a terrible price to pay.

Bring the conversation back to what matters, such as maintaining downside protection or staying on course with a risk-wise plan. This reconnects their emotions to a data-informed strategy, not market hype. You have a profound responsibility to show your investor clients how their emotions can affect their investments—and those they love.

That’s the beauty of actively adjusted, risk-managed portfolios. Static portfolios take a set-and-forget approach that allows market activity—good, bad, or downright ugly—to unfold naturally without much intervention. Instead of chasing headlines, an actively managed approach makes intentional changes to avoid problems in a timely, efficient manner. This may mean reducing tech exposure when valuations stretch beyond fundamentals, not after the correction is underway.

Understanding emotional drivers is only half the battle. The other half? Making sure the right investors find you in the first place. If you’re tired of investors bringing FOMO into every conversation, start upstream. Your messaging is the first line of expectation management for yourself, your time, and your book of business.

Your market positioning attracts certain types of investors

The right messaging can set investor expectations before a prospective client even appears on your calendar. You don’t need to work with every investor. Frankly, your calendar and mental health are grateful that you don’t. However, filtering prospects for the right clients is a worthy investment. That starts with the right messaging—how you talk about what you do (and what you don’t or won’t do).

Your messaging is a gatekeeper. I coach advisors to tell prospects and clients alike, in their own words:

To be clear, tactical growth positions and calculated risk-taking have their place in well-designed portfolios. The issue isn’t the asset class; it’s the emotional attachment and the expectation that every investment should feel like a rocket ship.

This message clearly telegraphs to investors that you’re setting healthy expectations before even the first foray into FOMO territory. You’re inviting them to take a breath and shift their mindset from chasing moonshots to building strength.

Be the advisor who says, “We don’t chase highs. We build futures with evidence-based investing.” The right investors will breathe easy. The wrong investors will spare you greater stress.

Shifting from reactive to proactive advisement

You don’t have to join the coming wave of advisor departures because of burnout driven by today’s investors. The challenges facing advisors aren’t new, but the technology amplifying them is stronger than ever. That is where you can shine.

The advisors who thrive in this next decade will be the ones who proactively manage investors well. The right messaging becomes your filter. Your coaching on emotional competence becomes your differentiator. Your commitment to evidence-based investing sends a signal through the noise.

This raging bull market will eventually cool. When it does, the advisors still standing will be those who built their practice on substance, not speculation. Start with one conversation this week. Ask a concerned client or prospect, “What are you truly wanting to know?” You might be surprised where it leads—and how much less stress you’ll feel.

Your clients won’t be the only ones who sleep well at night when you’re working with emotionally competent investors.

The opinions expressed in this article are those of the author and the sources cited and do not necessarily represent the views of Proactive Advisor Magazine. This material is presented for educational purposes only.