“But I think in this volatile environment, there might need to be a bit of rethinking around allocation. The boring part of the portfolio should still stick the same, but for example, most SMSFs or retirees who are focusing on income, the Australian dividend yield from the Australian market at the moment is actually at one of its lowest points … in the last four or five years.”

Pointing to the outsized pricing for Australian banks in particular, he argued that many investors need to “rethink the income side of things”.

“Particularly around ideas on how to potentially monetise that volatility, and looking at different ways about going about that,” Jocum said, adding that this includes “uncorrelated asset classes, such as alternatives – whether it's cryptocurrencies, gold, these kinds of real assets that a lot of people don't really think about”.

Sharing a similar sentiment, Mike Younger, co-portfolio manager of Prime Value, said: “Volatility is an active manager's best friend”.

“The average balanced fund … would probably have something like 12 per cent of their portfolio sitting in CommBank. So, when CommBank rises, they're buying more. When CommBank falls, they're selling,” Younger said.

“Active managers can take advantage of these dislocations, and one example more recently was Liberation Day when Trump's come out with his tariff announcements.

“What we saw was, over the course of March and April earlier this year, the S&P500 fell something like 9 per cent and has since put on all of that and a bit more – active managers can sit there and pick the eyes out of it.”

He related this to the now infamous TACO acronym, ‘Trump always chicken out’, which is used to describe the pattern of the US President making strong tariff announcements, only to walk them back.

“Markets initially reacted with shock and awe, and then eventually we became a bit more immune to it, Younger said.

“But what it meant was you had stocks in Australia in the small cap space, like a Breville Group, which makes 60 per cent of its revenue out of America, get absolutely smashed through that March, April period because it was going to be hit with very significant tariffs that it was going to be very difficult to pass on to consumers.

“That provided active managers the ability to come in and buy a slot like that, which then very quickly rebounded back to where it was and then some. We saw a repetitive pattern and what it meant was that we could sit there and react to particular shocks, having some level of confidence that sanity would ultimately prevail.”

Jocum added that there are a “plethora of ways” advisers can structure portfolios that are tailored to a client's “unique risk appetite”, including through ETFs.

“Now, with … the $3 million cap and the capital gains implications around that, maybe income will come back in focus.”

“Maybe things like alternative structures that are outside of the super scheme will be a big focus. A lot of challenges, but I still think advisers can navigate that through that whole portfolio construction piece.”