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Off the heels of an already-volatile year in 2025, financial advisors remain buckled down. Economic conditions are set to be even rockier in 2026, as the US-Israel war with Iran has set inflation on a continued upward trajectory and further rankled markets.
Even if there were a de-escalation in the conflict, a domino effect has begun – meaning advisors should prepare for longer term volatility and even the potential for structural economic disruption, Max Kulyk, founder and CEO of Chicory Wealth, shared in an interview.
The war with Iran is “going to have an impact for some time” on markets and the economy, he said.
“And perhaps, even if we have a ceasefire, it will continue to have an impact.”
As such, advisors who have recently started their own practice, and are running a small or one-person shop, are likely fielding many questions — and managing the anxieties — of their clients.
“We do a monthly webinar with our clients and we had 50 to 60 clients join our last webinar,” Kulyk said. “We discussed any changes we’ve been making in their portfolios,” since the war began in late February, he explained.
“We’ve seen volatility in the market, due to the partial shutdown of the Strait of Hormuz … The first impacts on markets relate to the price of oil — and its impact on inflation,” Kulyk said.
Going into 2025, Chicory Wealth already expected inflation to remain high, but the ensuing conflict only exacerbated inflation concerns.
“It’s a really bad scenario. The only winner as far I can see (in this conflict) is Russia, if they will be able to fill their coffers by selling oil reserves,” Kulyk said.
Oil Prices, Recession Fears
Kulyk said that Chicory Wealth is “pretty defensive” in its investment approach — and that its team consists of conscious investors who build individual stock portfolios for clients. (Chicory only uses ETFs in its bond portfolio, not for its stock investments, according to Kulyk.)
“We are always mindful about our equity exposure, and have already increased our exposure to the international equities space going into 2025. We’ve now increased our exposure to inflation-protected Treasuries,” he said.
“It will be interesting to see about the dollar, and if Iran can successfully turn the Strait of Hormuz into a toll highway that does not take U.S. currency. This is on the back of self-inflicted wounds via tariffs that created major disruption (last year),” Kulyk added.
For Advisors Faring Long-Term Fluctuations
Financial advisors that are transitioning into running their own practice — and may not have dedicated investment strategists or staff who do economic forecasting — will need trusted sources of information they can rely upon.
“I do think that we are living in an unbelievably difficult moment to try to stay on top of everything that’s going on and find sources of information that are reasonably accurate,” Kulyk said.
“In the past I would have said you have to take the long view, and while I don’t necessarily disagree with that, I do think we are in a moment where some of the rules have changed,” he added.
“I went through the 2008 financial crisis with my clients. And I remember that nobody really believed it could happen until it had happened. Markets can be fine until they are suddenly not and everyone is racing for the door.”
“My advice for advisors just starting out (on their own) is to be mindful of the risk you are taking with your clients’ money. And if you are going to make an error, make an error to the conservative side. Tread carefully,” Kulyk said, noting that today’s market volatility and economic stress could evolve into “structural disruption.”
In early March, Morgan Stanley Wealth Management published key takeaways for investors amid the escalating conflict with Iran.
Regarding market and portfolio implications, the firm noted that in the long-term, “investors should remember that geopolitical risk is becoming a persistent part of the backdrop, not merely episodic.”
“Investors may need to price in a world where regional blocs and strategic competition drive markets, risk premiums and asset allocation,” Morgan Stanley’s post said. “In 2026, consider increasing exposure around themes like defense, security, aerospace and industrial resilience, where government spending can drive multiyear demand.”
Kulyk at Chicory Wealth noted, “there is no great place to hide temporarily, but in the longer term we think sustainable companies will win,” whether that be clean energy companies or those committed to sustainable development goals.
“You can do less damage if you take a more conservative bent,” Kulyk said. “If there was ever a time to be cautious, now is that time.”
Danielle Walker is a freelance journalist with 15 years of business reporting experience. She previously worked at Business Insider and Pensions & Investments, among other business publications. Her work has been published in the Financial Times, Barron’s and Chief Investment Officer. Danielle is currently based in Norfolk, Virginia.
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