Advisors want more alternatives but scaling up is the hard part

Financial advisors around the world are deepening their commitment to alternative investments, but a new global survey reveals that the industry's most pressing challenges are no longer about whether to use alts.

The hard part of how to deliver alts efficiently across an entire practice, according to the 2026 iCapital Global Advisor Survey, which polled 870 financial professionals across 15 countries during the first half of 2026.

The study finds that 89% of advisors plan to maintain or increase their allocations to alternatives over the next 12 months, while the share planning to actively increase allocations nearly tripled, jumping from 14% in 2025 to 39% in 2026. Client appetite is keeping pace, with 84% of respondents reporting that client interest in alternatives has increased or remained stable over the past two years.

Economic optimism among advisors actually declined over the same period (from 74% to 61%), but allocation intentions surged anyway. That divergence suggests alternatives are becoming a structural fixture of long-term portfolio construction rather than a tactical bet on market conditions.

The survey points to a widening gap between advisors' conviction in alternatives and their firms' operational readiness to implement them at scale. Four in five respondents described themselves as confident or very confident in selecting and allocating alternatives.

Adoption barriers

Despite that confidence, 59% cited difficulty assessing liquidity and risk exposure across asset classes as a significant challenge, while 53% flagged compliance and regulatory concerns and 49% pointed to portfolio construction difficulties.

Separately, 11% of respondents identified client reporting as a top barrier to broader usage, down sharply from 20% the prior year.

Concerns about access to investment products have faded (dropping from 11% to just 5%) while the complexity of explaining alternatives to clients rose from 11% to 17%. The data suggests the industry has moved past the question of whether advisors can get into alternatives. The harder question now is whether firms can manage them consistently once they're in.

iCapital frames this as a three-stage journey: access, adoption and scale. Most of the attention in recent years has been focused on the first two.

The survey's central argument is that scale (i.e. delivering alternatives consistently across advisors, clients and portfolios) has become the defining challenge for the next phase of growth.

The firm-size breakdown in the survey sheds light on where different practices are in that journey. Firms managing under $400 million in assets under management are most likely to be in early-stage adoption, using alternatives primarily for diversification, with their biggest need being client education.

But mid-sized firms in the $400 million to $1 billion range are increasingly deploying alternatives as a competitive differentiator, using them to attract and serve more sophisticated clients. Their top need is allocation guidance and client-facing materials. Larger firms above $1 billion are further along, focused on compliance infrastructure, semi-liquid access and scale.

Technology playing a key role

On the technology side, risk and performance analytics tools ranked as the top technology priority, cited by 51% of respondents, while custodian and fund administrator connectivity decreased from 41% to 28% year-over-year.

Demand for automated subscription and redemption processing decreased from 41% to 26%. Separately, 59% of advisors identified technology and implementation as a priority area for continuing education — underscoring that the knowledge gap in the field has shifted from understanding what alternatives are to understanding how to operationalize them.

That shift in educational priorities mirrors the broader industry transition. Interest in foundational alternatives content fell modestly, but the appetite for practice management content fell from 41% to 37%, and technology-focused learning remained the most in-demand category overall at 59%.

The asset class picture is also evolving. Private equity remained the most sought-after category at 64%, roughly flat from the prior year. But interest in hedge funds decreased from 54% to 42%, and venture capital interest rose from 26% to 37% — suggesting advisors are not just adding alternatives exposure broadly but are actively reshaping which parts of the alternative landscape they want to own. Real estate interest increased from 44% to 50%, consistent with a broader reassessment of the sector.

Meanwhile, advisors' expectations for evergreen fund exposure are rising. The share anticipating that their clients will hold 11% to 15% in evergreen strategies over the next two years decreased from 67% to 51%, while the share expecting less than 5% exposure rose. That trajectory points to a structural buildout of semi-liquid alternatives across client portfolios and raises the operational stakes considerably for firms that are not yet equipped to manage those positions at scale.

The full iCapital 2026 Global Advisor Survey report is available at icapital.com