Market volatility was cited by 79% of financial advisors as the biggest challenge for investors during 2012, according to a survey conducted by Putnam. It’s easy to see why. Stock market volatility has been much higher since the 2007 subprime crisis compared with earlier years, making risk a major concern for portfolio strategies.

A large segment of the survey’s respondents — 30% — also described the European debt crisis as the topic most likely to influence markets this year.

In addition, 98% of advisors agreed that actively managed funds should play a role in client portfolios to help investors meet the twin challenges of mitigating risk and finding returns.

A total of 195 advisors, from a range of distribution channels, participated in the online survey between December 2011 and January 2012. Responses to the volatility and active management questions are below.

For Putnam’s views regarding both market volatility and active return opportunities, read Capital Markets Outlook.