New joint research from CAIS and Mercer reveals financial advisors are embracing alternative investments, with a strong majority looking to dial up their exposure in the near future.
Drawing from a poll of 550 advisors conducted between September 10 and October 18, the research found nearly half of respondents have allocated more than 10 percent of client portfolios to these assets.
The survey also found that 92 percent of advisors currently use alternative investments, while 91 percent plan to increase allocations within the next two years.
“Responses from the advisor community illustrate the evolving advisor sentiment around alternatives from optional components to pillars of a portfolio,” Neil Blundell, chief investment officer at CAIS Advisors, said in a statement revealing the results. “We’re seeing a seismic shift in demand as advisors increasingly recognize the diversification and growth potential alternative investments provide.”
With trillions of dollars projected to flow into the alts space, a majority of participating advisors agreed streamlined access to non-traditional assets and strategies should be a priority. More than three-quarters of respondents expressed interest in using model portfolios to simplify allocation processes, while two-thirds highlighted platform integrations as a key technology feature. Portfolio construction tools and model portfolios were cited as the top resources to navigate the complexities of alternative investments.
“The findings underscore the importance of equipping independent advisors with the same high-quality resources and due diligence capabilities that institutions have benefitted from,” said Gregg Sommer, partner and US financial intermediaries leader at Mercer.
The survey also pointed to growing advisor interest in certain asset classes and strategies. Structured notes saw a notable uptick, with 38 percent planning to increase allocations this year, compared to 27 percent in 2023. Traditional asset classes such as private debt (89 percent), private equity (86 percent), and real estate (85 percent) remain popular.
Among the top themes advisors would like to put in front of their clients, 39 percent cited tax-advantaged strategies, while another three-tenths expressed an interest in infrastructure (28 percent) and artificial intelligence (28 percent).
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