Even though the majority of advisers are not as well-versed on the subject of alternative investments as they might like, few are deterred from discussing them with clients — or actually putting them to use in their clients' portfolios.
InvestmentNews recently conducted a survey of advisers in advance of our first Alternative Investments Conference that aimed to get advisers' views on alternatives. In one question, we asked point blank: "Do you feel as knowledgeable about alternatives as you'd like to be?"
The response? Fifty-two percent of advisers said no. At the same time, 88% said that they feel quite comfortable discussing alternatives with their clients — and 89% of the advisers we surveyed are currently employing alternatives in their clients' portfolios.
Now, a lot of investment vehicles can qualify as alternatives — ranging from real estate, to managed futures, to structured products or private equity. So it's possible that advisers feel quite comfortable with certain types of alternatives. More than 70% of advisers surveyed, for example, are currently recommending commodities and real estate strategies. More esoteric strategies, such as structured notes, may be fueling advisers' need for knowledge.
Also, here's a quick video featuring Gabe Burstein talking about why alternatives may actually become more traditional (or at least typical) strategies than anything else --M.B.