Market optimism among investors and advisors is tumbling to half of what it was in 2021, according to a survey from Greenwald Research, released today.

Consumers' optimism about their investments has dropped from 67% to just 31% in the past year, with consumer pessimism skyrocketing—from a just 7% a year ago to 36% today, according to the firm's Retiree Insights Study, which surveyed 1,000 financial consumers between 50 and 70 years of age with investable assets of $200,000 or more.

Market confidence has also slumped among advisors, sliding from 78% in 2021 to 34% today, while pessimism about the investment outlook jumped to 25% from just 3% a year ago, according to the survey of 300 financial professionals, which is now in its 10th year.

“The optimism that followed the rapid economic recovery from the pandemic has evaporated,” said Doug Kincaid, managing director for Financial Services at Greenwald.

Financial professionals’ pessimism is also reflected in their sinking expectations for investment returns. Advisors in the survey forecast equity returns of 6% over the next year, compared to 9.7% in 2021 and 7.8% in 2020. Combined with current low forecasts for fixed-income returns, advisors estimate a total return of just 4.3% this year, Greenwald found.

Investors are also experiencing uneasiness about a future market recovery. “A year ago, 60% said future recoveries would be as fast or faster than the record-breaking pandemic recovery. Now only 44% see that as likely,” Greenwald found.

Both consumers and financial professionals are more likely to be concerned about “consistent small investment losses” eating away at their nest eggs over time (37% of professionals and 32% of consumers expressed this concern), rather than about a single big loss (27% of professionals, 18% of consumers).

The silver lining of rapidly deteriorating optimism is that investors are meeting with their advisors more frequently—both in person and virtually, according to the survey.

Greenwald found that two-thirds of respondents have met with their advisors at least once in person in 2022 (up from 45% in 2021) and 40% had at least one virtual meeting (up from 31%).

“It’s clear that financial consumers need help navigating the current economic environment to regain confidence in the future. Our findings indicate that consumers are engaging more closely with their advisors and, in increasing numbers, are looking to their employers to provide a range of 'financial wellness' resources,” Kincaid said.

About half of investors want in-depth discussions about their finances once a year and 40% want quarterly check-ins, according to the survey.

Also, 93% say accessibility—defined as getting a response to an inquiry within 24 hours—is very important when working with a financial professional.

Consumer desire for more advice was also evident in their opinions about workplace advice, according to the study. The services that investors want from their employer include personalized financial goal setting (55%, up from 36% in 2021), access to free or subsidized personalized financial advice (54%, up from 40%), education on planning for healthcare costs (52%, up from 45%), and financial education from advisors (51%, up from 36%).

Seventy-nine percent of consumers said their  biggest worries are a high level of inflation and an economic recession. Global conflicts and crises were ranked third at 71%.