The State of Alternative Investments in Wealth Management

March 20, 2024

Courtesy of Mercer

Nearly 9 in 10 advisors surveyed (85%) intend to increase their allocations to one or more alternative asset classes over the next 12 months.

To better understand the evolving role of alternative assets in today’s private wealth portfolios, CAIS and Mercer joined together to survey a select group of more than 250 independent financial advisors in the fall of 2023 at the second annual CAIS Alternative Investment Summit.

In the report, we feature key findings of the survey, along with some insights for advisors seeking to differentiate their business with alternatives.

Key Takeaways:

  • Almost all (95%) advisors surveyed with current alternatives allocations plan to stay invested in these asset classes, allocating 6% or more by the end of 2025.
  • A large majority (83%) of advisors believe access to alternatives differentiates their practice from peers; 79% believe it helps clients meet their goals and objectives.
  • More than half (62%) of financial advisors currently allocate between 6% and 25% of clients’ portfolios to alternative asset classes, with (85%) of them expecting to increase allocations to one or more alternative asset classes further within the next year
  • the majority of advisors acknowledge the role alts may play in bottom-line impact for their business, with 78% saying it helps clients meet goals and objectives and 59% suggesting that access to alternative investment opportunities is helping them win new clients.
  • Despite the demand for alternatives, hurdles still exist, with 55% of respondents citing high levels of administration and paperwork as barriers to investing in these strategies. Advisors also cited lack of liquidity (47%) and concerns around due diligence and compliance (35%) as barriers to entry.

To view the full report and findings, click here.

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