Twenty-seven percent of investors say that a geopolitical crisis is the biggest tail risk – up from 12 percent in February. Hedge funds are also getting out of risk, and have reduced both leverage and exposure to equities.
(Read more: Putin:Crimea as part of Ukraine a 'shocking injustice' )
"Responding at a point of growing tension in Ukraine, 81 percent of investors said they see geopolitical risk posing a threat to financial markets stability – more than four times the reading one month ago," said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.
As well as geopolitical risks, asset managers are shying away from risky assets because they are now too expensive, the research showed. Some 12 percent of investors now think stocks are overvalued than at any other time since July 2000.
However, Hartnett advised risk-adverse investors to put their spare cash into stocks despite the rise in geopolitical risks.
"With neither inflation nor recession posing a threat, we believe the equity bull market is far from over and investors should be putting excess cash into risk assets," said Hartnett.
(Read more: Global stocks slide as Crimea referendum looms)
Flaring tensions between Russia and the West over the future of the Ukrainian region of Crimea have accentuated a flight to safety, as global stock markets face increased volatility.