Demand for alternative asset classes is rising among advisors ahead of expected continuation of public market volatility.
A survey of advisors attending the recent CAIS Alternative Investment Summit found that 62% allocate between 6% and 25% of clients’ portfolios to alts and 85% expect to increase allocations to at least one alternative asset class in 2024.
Almost eight in ten respondents to the CAIS survey, conducted in collaboration with Mercer, said alternatives help them meet client goals and 59% believe access to alts is helping them attract new clients.
“The transition to a three-dimensional portfolio including alternative investments is accelerating rapidly. Our latest data suggests that alts are also helping independent advisors differentiate from competitors and build their practices,” said Matt Brown, Founder and CEO of CAIS. “As the champion of the independent advisor community, we remain focused on helping them adopt, and benefit from, alternative investment strategies.”
Current allocations are focused on real estate (96% of advisors include these assets in their clients’ portfolios), private equity (93%), and private debt (91%), with almost seven in ten advisors planning to increase allocations to private equity and private debt in the next 12 months.
However, 55% of poll participants said the high levels of administration and paperwork is a barrier to investing in these strategies, 47% cited a lack of liquidity, and 35% had concerns around due diligence and compliance.
“As the wealth channel continues to embrace alternative investments, these findings underscore the independent advisor’s need for strategic partners that can help them streamline alts adoption,” said Gregg Sommer, partner and US Financial Intermediaries Leader at Mercer. “Mercer provides independent due diligence and monitoring for funds available on the CAIS platform, with our reports and ratings made readily available to its users, to help advisers continue to differentiate their portfolios.”
Another recent study by Fuse Research Network found a lower level of advisors committed to alternatives, especially emerging structures like interval funds and BDCs.
ASA reacts as regulator drops no-deny policy, freeing firms and individuals to publicly dispute allegations after reaching settlements.
Joel Frank allegedly sold more than $39 million worth of investments in the Equilus Funds to more than 90 investors,
The Charity Parity Act would eliminate a costly IRA rollover requirement that blocks direct charitable transfers from workplace retirement plans.
A last-minute court filing ends a case against the federal tax-collecting agency that had drawn unprecedented conflict-of-interest questions from Democratic critics.
Advisors discuss their use of AI now and how it will change going forward
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
