Two-fifths of advisors want to confer with investment specialists

Financial advisors in the US are increasingly seeking the expertise of specialists to navigate the complexities of today’s investment environment, according to a recent study by ISS Market Intelligence.

The survey, which gathered responses from 782 advisors in March 2024, underscores the growing reliance on specialists particularly in the areas of alternative investments and portfolio construction.

Diversification appears to be a continued point of focus among advisor, as the findings revealed significant interest in alternative investments. Just over two-fifths (42 percent) of advisors in the survey emphasized the need for asset managers to provide specialists in this area to support informed decision-making. The sentiment was even stronger among wirehouse advisors, where 56 percent stressed the importance of access to alternative investment specialists.

The study also reveals a broader trend toward frequent engagement with specialists. Among the advisors ISS MI surveyed, 25 percent reported an increase in meetings with alternatives and ETF specialists over the past year.

Looking ahead, 27 percent of advisors said they plan to increase their interactions with alternatives specialists, and 26 percent expect to do the same with ETF specialists over the next 12 months.

Putting a finer point to those plans, more than a third (35 percent) of advisors said they’d like to meet with alternatives specialists at least quarterly, the same proportion of advisors who said they want to connect with portfolio construction specialists every three months at minimum. Just slightly fewer advisors, 34 percent, said they’d like to meet with ETF specialists at least once per quarter.

However, ISS MI’s research also highlighted challenges for asset managers when it comes to effectively deploying specialists in the field, particularly in terms of having them work meetings solo. When asked whether they’d want wholesalers present during meetings with specialists, advisors were ambivalent, with just 28 percent of those surveyed saying they prefer a wholesaler around.

At the same time, many advisors highlighted that when it comes to working with specialists, the top challenge is a lack of understanding of their business. That supports a case for wholesalers to tag along as they’re able to provide proper context and insight on advisor behavior for specialists during meetings.