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The Biggest Global Risks of 2023

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The Biggest Global Risks of 2023

The profile of risks facing the world is evolving constantly. Events like last year’s invasion of Ukraine can send shockwaves through the system, radically shifting perceptions of what the biggest risks facing humanity are.

Today’s graphic summarizes findings from the Global Risks Report, an annual publication produced by the World Economic Forum (WEF). It provides an overview of the most pressing global risks that the world is facing, as identified by experts and decision-makers.

These risks are grouped into five general categories: economic, environmental, geopolitical, societal, and technological.

Let’s dive into this year’s findings.

2023’s Risk Profile

In the lower–middle portion of the chart are the risks that could have serious impacts—such as attacks involving nuclear or biological weapons—but that were highlighted by fewer experts.

Over in the top-right quadrant of the chart are the risks that a number of experts mentioned, and that are causing a strain on society. Not surprisingly, the top risks are related to issues that impact a wide variety of people, such as the rising cost of living and inflation. When staples like food and energy become more expensive, this can fuel unrest and political instability—particularly in countries that already had simmering discontent. WEF points out that increases in fuel prices alone led to protests in an estimated 92 countries.

One risk worth watching is geoeconomic confrontation, which includes sanctions, trade wars, investment screening, and other actions that have the intent of weakening the countries on the receiving end. Efforts to mitigate this risk result in some of the key themes we see for the coming year. One example is the onshoring of industries, and “friend-shoring”, which is essentially moving operations to a foreign country that has more stable relations with one’s home country.

How Prepared Are We?

It’s one thing to be aware of risks, but it’s quite another to have the ability to head off negative events when they come to fruition.

The chart below is a look at how prepared we are globally to deal with specific types of risks that could arise in the next few years.

At the top of the chart are risks that experts feel society is better equipped to handle with current plans and resources. Moving towards the bottom of the chart are risks that experts feel are more of a threat since mechanisms for handling them are weak or non-existent.

global risk preparedness in 2023

Experts are generally more confident in solutions in the military or healthcare domains. Environmental and societal challenges leave policy and decision-makers less confident.

One telling observation from the data above is that none of the risks left a majority of experts feeling confident in our ability to prevent the risk from occurring, or prepared to mitigate its impact. As the 2020s are shaping up to be a turbulent decade, that could be a cause for concern.

Where does this data come from?

Source: The Global Risks Report 2023, produced by the World Economic Forum (in partnership with Marsh McLennan and Zurich Insurance Group).

Data note: The chart in this article is based on the Global Risks Perception Survey 2022-2023. A list of 32 global risks, along with their definitions, is shown in Table A.1 of the PDF. Page 77 of the report also includes detailed information on sample sizes and demographics of respondents.

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Investor Education

The Top 5 Reasons Clients Fire a Financial Advisor

Firing an advisor is often driven by more than cost and performance factors. Here are the top reasons clients ‘break up’ with their advisors.

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The following content is sponsored by Morningstar
This circle graphic shows the top reasons for firing a financial advisor.

The Top 5 Reasons Clients Fire a Financial Advisor

What drives investors to fire a financial advisor?

From saving for a down payment to planning for retirement, clients turn to advisors to guide them through life’s complex financial decisions. However, many of the key reasons for firing a financial advisor stem from emotional factors, and go beyond purely financial motivations.

We partnered with Morningstar to show the top reasons clients fire an advisor to provide insight on what’s driving investor behavior.

What Drives Firing Decisions?

Here are the top reasons clients terminated their advisor, based on a survey of 184 respondents:

Reason for Firing% of Respondents
Citing This Reason
Type of Motivation
Quality of financial advice
and services
32%Emotion-based reason
Quality of relationship21%Emotion-based reason
Cost of services17%Financial-based reason
Return performance11%Financial-based reason
Comfort handling financial
issues on their own
10%Emotion-based reason

Numbers may not total 100 due to rounding. Respondents could select more than one answer.

While firing an advisor is rare, many of the primary drivers behind firing decisions are also emotionally driven.

Often, advisors were fired due to the quality of the relationship. In many cases, this was due to an advisor not dedicating enough time to fully grasp their personal financial goals. Additionally, wealthier, and more financially literate clients are more likely to fire their advisors—highlighting the importance of understanding the client. 

Key Takeaways

Given these driving factors, here are five ways that advisors can build a lasting relationship through recognizing their clients’ emotional needs:

  • Understand your clients’ deeper goals
  • Reach out proactively
  • Act as a financial coach
  • Keep clients updated
  • Conduct goal-setting exercises on a regular basis

By communicating their value and setting expectations early, advisors can help prevent setbacks in their practice by adeptly recognizing the emotional motivators of their clients.

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Curious about what drives investors to hire a financial advisor? Discover the top 5 reasons here.

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