After living through the economic and market crisis, clients have more modest, realistic expectations-but too few have internalized what that might mean for their own financial plans. That is the major finding of the recent "Get Real" poll by Allianz Global Investors and GfK Roper, an online survey of 1,000 investors, fielded in April, which sought to gauge the expectations and actions of individuals with at least $250,000 in investable assets.

This view into your clients' mindset will help you provide more tailored and effective counsel. If you know what your clients are thinking and feeling now, you can understand what is driving their investment decisions and what it will take to help them "get real" about any necessary changes.

Our survey revealed that although investors are aware of new economic realities, they haven't yet translated that awareness into action regarding their own plans or portfolios. Fortunately, you can help your clients reconcile this disconnect. And they are eager for your help: 89% of advised investors have confidence in the professional advice they receive, and 82% say they follow it most or all the time.

NEW RESPECT FOR RISK

If anything positive came out of the financial crisis, it's that investors have developed a healthier respect for risk. According to the data, more than 70% believe that another major market meltdown is likely sometime in the next five years. They also appear to recognize that we have entered a new era, characterized by more moderate economic growth and a shaky recovery that may be threatened by a stubbornly low employment rate.

Investors are also more clear-eyed about their expectations for stocks. After 2009's extraordinary run-up, three in five investors don't expect equities to increase more than 7% a year, with roughly half tagging the market's five-year number at somewhere between 3% and 10%.

This is a sobering view, to be sure, but one that should actually support your efforts. Personal experience and extensive media coverage about market losses over the last two years have helped educate investors, allowing you to focus more of your energy on working with clients to develop and implement effective strategies.

QUESTIONING STRATEGIES

For years you have no doubt preached to your clients about the importance of staying the course when it comes to long-term investing. Investors tend to react emotionally to market fluctuations. But now may be one time when strategic change is necessary.

In the past, investors relied on asset-class diversification to mitigate risk and maximize return potential. Fundamental changes in the global economy and the markets have rendered this traditional strategy less effective. In our opinion, managing risk in this new environment will require a new approach, in which investors actively defend themselves against certain known risks and then pursue return potential.

THE HAMLET SYNDROME

Even though they acknowledge that the investment climate has changed dramatically, 38% of respondents report they have not changed their investment strategies. Advised investors do somewhat better than those who go it alone: 30% of the advised say they've reduced the risk in their portfolios over the past year, versus only 18% of the unadvised.

This inability to take action, even as it cries out to be taken, is often described as the "Hamlet Syndrome." As you may remember from freshman English, Shakespeare's play opens with Hamlet being visited by the ghost of his father, who instructs him to avenge his murder. Instead, Hamlet spends five acts paralyzed by the moral complexity of the task before him. "To be or not to be," he laments, until matters come to an unfortunate end. With clients unwilling or unable to change, the onus is on you to help them move forward, putting what they've learned about risk into practice.

DON'T WORRY, BE HAPPY

In order to help clients make needed changes in their financial plans, it helps to understand what holds them back in the first place. One obstacle is the tendency for people to be overly optimistic about their personal prospects, no matter how they see the larger situation. Consider that 80% of those surveyed believe they are likely to enjoy above-average health in retirement, a number that is statistically unlikely, to say the least. More important, they may be harboring unrealistic expectations about how well their current strategies will see them through. For instance?

* 87% are somewhat to very confident they will reach their long-term financial goals.

* 86% preretirement investors say their savings and investments will generate enough income to last throughout retirement.