Morningstar Investor Perspectives: How Can Advisers Turn Complexity into Clarity?

To better manage client emotions, advisers can start by:

• Providing behavioural coaching that helps investors stay grounded
• Maintaining proactive and frequent communication
• Adding clear context around investment decisions

So, what are the factors behind this market anxiety? Investors are most worried about geopolitical tensions (38%) followed closely by market volatility (37%), inflation (35%), and economic slowdown/recession (31%). Notably, more than two-thirds (71%) say they’re extremely or somewhat concerned about inflation as an overall economic issue. This means that education on navigating market concerns is a particular area in which advisers can provide value.

Today’s investors are also using a wide range of sources to inform their investment strategies. In addition to financial advisers (36%), participants rely on friends and family (34%) and internet searches or other online websites (33%). Seventeen percent of investors now use AI, a striking increase from 8% in 2024.

Still, frequent use doesn’t necessarily translate to perceived value: With the exception of financial advisers (89%), investors reported an accountant or tax adviser (80%) and investment or trading platforms/websites (74%) as the most valuable sources of information.

Despite these sources, the top investment decision obstacles that investors face include:

• Fear of making a mistake or losing money (36%)
• Market volatility (33%)
• Unclear fees, costs, or tax implications (25%)
• Difficulty knowing which information or sources to trust (22%)

At the same time, more than half of investors (56%) say they’re confident in their ability to separate clear or accurate investment information from confusing or misleading information. This highlights an important distinction: Trust and confidence aren’t the same.

The 22% of participants who struggle to identify reliable sources are flagging a trust issue. In contrast, the 56% who feel confident in their filtering ability may be displaying a confidence problem. Information overload doesn’t only reduce confidence—it can inflate it, creating a sense of certainty even as the quality of information-processing declines. With AI-powered investing content continuing to expand, this challenge is likely to intensify.

For advisers, the 56% of investors who feel confident are the more difficult audience. Those who acknowledge uncertainty tend to welcome guidance, but confident clients often come with views that they likely don’t want challenged.

The opportunity lies in reframing the conversation away from whether information is “right” and toward how investors evaluate it. Shifting the focus to the decision process rather than the outcome is where advisers can add genuine value beyond the portfolio.

The rise of private markets has been one of the most significant developments in capital markets. As of April 2026, 1,643 private companies worldwide qualified as “unicorns,” meaning their valuations exceeded $1 billion.

The growing accessibility of private markets means that investors have greater opportunities for higher potential returns and portfolio diversification.

Despite these possibilities, participation remains limited—72% of participants don’t invest in private markets, and 52% don’t invest in alternatives at all. This gap may be driven by a lack of comprehension, as only one-fifth (18%) feel they understand how private market investments work, including the intricacies of their risks, fees, and liquidity constraints.

Beyond private markets, other types of alternative investment decisions also vary for investors. Our research shows that cryptocurrency is the most widely held alternative, though ownership ticked down from last year (23% in 2026 compared with 25% in 2025). Private equity ownership decreased by 4% (22% in 2026 compared with 26% in 2025) while private debt saw a 2% increase (8% in 2026 compared with 6% in 2025).

Altogether, these shifts suggest that investors aren’t opting out of alternatives but are becoming more selective as they weigh what investments are the best fit for their situation along with possible concerns around risk, liquidity, and transparency.

This behaviour is further underscored by a potential mismatch in time horizons: While our framework recommends holding alternatives for at least 10 years, most participants (41%) reported three years as the maximum investment time where they feel comfortable. Investable asset levels can be a driver—those with more than GBP 250,000 are more likely to be comfortable beyond three years than those with less than GBP 250,000.

Advisers may improve investors’ understanding of alternatives by:

• Offering thorough education around private markets
• Setting realistic expectations for investment performance
• Tailoring asset allocations to align with clients’ goals and risk tolerance

While private markets continue to attract attention, they’re not the only area seeing growing investor interest: Exchange-traded funds are gaining momentum across the UK. The European ETF market had its strongest start to a year in nearly three decades with flows totaling EUR 49.7 billion in February 2026. Reflecting these broader trends, our study revealed ETFs are steadily increasing in usage with 19% of participants owning ETFs in 2026, up from 15% in 2025 and 13% in 2024.

By determining how ETFs fit within clients’ goals and providing context around various ETF structure and strategies, advisers can help investors build stronger portfolios. They can use our Morningstar Medalist Rating to identify high-quality ETFs likely to outperform over a full market cycle.

Today’s investors are becoming more accustomed to AI. Our study finds that nearly half (45%) of participants stated high trust of generative AI helping them make investment decisions in 2026—a significant increase from 29% in 2024. The number of participants that reported low trust in generative AI declined from 38% in 2024 to 27% in 2025, implying that investors are growing more open to the idea of AI regardless of their trust level.

When determining whether to trust an AI tool, high-trust investors considered aspects like:

• Demonstrable evidence and social proof (40%)
• Reliability, performance, and limits (28%)
• Practical utility and usability (17%)

On the other hand, low-trust investors cited their stance on factors including:

• Scepticism, reluctance, and personalization barriers (48%)
• Reliability, performance, and limits (38%)
• User control, human oversight, and support (18%)

Although trust in AI among retail investors is rising, usage tells a different story. This disconnect is where advisers should pay closest attention. Most investors (68%) still don’t rely on AI for investment decisions, and only 2% use it for most decisions, typically to confirm the output themselves. This hesitation is remarkably consistent across generations, suggesting the issue isn’t simply familiarity.

What advisers may be missing is that the barrier isn’t scepticism, but the absence of a trusted bridge.

Millennials best illustrate this tension: While they hold the highest trust in AI (60%) and nearly half (45%) use it as a supporting tool, reliance remains limited. If even the most AI-receptive cohort hasn’t crossed that line, the friction is likely structural rather than about mindset. Investors appear willing in principle, but uncertain in practice about how to integrate AI into their decisions.

That’s where advisers play a critical role—not by pushing AI adoption, but by modelling responsible, human-guided use. Until AI is anchored in human guidance that investors trust, their confidence is likely to remain theoretical rather than actionable.

To help close investors’ AI trust-usage gap, advisers can take actions such as:

• Translating AI insights into clear, contextual guidance
• Grounding decisions in human judgement and accountability
• Acknowledging AI limitations while meeting investors’ expectations for human interaction

But investors who use AI may still prefer to keep it at a distance. Interestingly, more than half (51%) of investors believe that the primary responsibility lies with themselves versus with the AI (24%) when acting on an AI-based investment recommendation that results in financial losses.

Yet when choosing to follow a human financial adviser’s recommendation with eventual financial losses, investors reported the responsibility primarily lies more evenly split between themselves (37%), a human adviser (28%), or both parties equally (34%).

This implies that investors view AI as a tool instead of an authority and that they still place deeper trust in human judgement—both their own and an adviser—than technology. Advisers can reinforce their position as a reliable partner by differentiating themselves through human strengths like empathy, emotional support, and deep client conversations.

With constant distractions coming from seemingly every direction, investors may struggle to stay focused—making long-term planning and investing feel even more distant and unattainable.

Despite these challenges, 67% of investors see long-term investing appealing as a path to financial security, stability, and inflation hedging (24%) and portfolio growth potential (18%). Meanwhile, nearly one-third (32%) view it as difficult because of emotional barriers and risk aversion (19%) and uncertainty about future returns and outcomes (16%).

In other words, many investors are interested in long-term investing but might have trouble staying confident in sustaining it over time. However, participants say a more stable financial situation (27%) would most strengthen their commitment to long-term investing. And tools like goal-tracking dashboards that show progress (41%) and investment simulation or projection tools (31%) could reinforce their focus.

Advisers may encourage long-term investing through approaches like:

• Anchoring discussions in investing fundamentals rather than short-term trends
• Connecting long-term plans with success metrics for tracking progress
• Managing investor concerns to keep clients invested over time

Just as every investor is different, so is their definition of long-term investing. Overall, investors reported it most commonly represents retirement security (28%) followed by stability and peace of mind (21%), and wealth growth (21%).

This varies even further across generations and investable asset levels: Generation Z and millennials primarily consider long-term investing as financial independence (27% and 26%) or wealth growth (27% and 24%), while Gen X and baby boomers are more likely to believe this as retirement security (41% and 43%).

Those with higher investable assets reported it as wealth growth (42%) while those with lower investable assets see long-term investing as something they should do (9%) or unrealistic (5%), both higher than all other investable asset levels.

Our study finds 64% of investors agree that long-term investing success is mostly within their control, while only 10% disagree with that statement. More than half of all generations share this belief in accountability: Millennials agreed the most (72%) and baby boomers agreed the least (58%).

The mindset also differs based on investable asset levels. Eighty-three percent of participants with higher investable assets agreed about their level of control, while only 59% of participants with lower investable assets agreed. These findings highlight the need for advisers to produce advice that’s tailored to clients’ life stages, financial circumstances, and goals rather than a one-size-fits-all approach.

Financial advisers can make a meaningful impact at every stage of an individual’s investing journey. From offering tailored solutions to meeting emotional needs, advisers are uniquely positioned to bring real transparency and value as financial choices and markets evolve.

This impact extends even beyond today’s investors to those who are considering getting started in investing. According to our research, 11% of non-investors say they’re likely to begin investing in the next three years.

What would boost their confidence to take action? Participants responded that clear explanations of different investment options (40%) and guidance on how to assess risk tolerance (27%) would be most helpful.

Advisers can make the path more accessible for non-investors by:

• Simplifying investment decisions and clearly outlining next steps
• Identifying clients’ risk tolerance to tailor strategies accordingly
• Addressing emotional concerns and proactively communicating

To stand out from the competition and provide reliable solutions, it’s more important than ever for advisers to translate uncertainty into practical insights.

Explore behavioural finance insights to better understand the psychology behind clients’ investment questions and decisions, potentially leading to stronger client relationships.

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