HNW Investors, FAs Salivating for Alternatives: Survey — Evening Brief – 10.14.24
There is a growing appetite for alternative investments among high-net-worth individuals and financial advisors, with nearly 90% ready to increase the size of their portfolios, according to a new survey
The study by Brookfield Oaktree Wealth Solutions and conducted by CoreData revealed that 88% of existing alternative investment users are open to increasing their alternative investments and 81% believe alternatives will outperform traditional portfolios in the long run. Over half would consider allocating 20% or more to alternatives if their financial advisor recommended it.
Investors and financial advisors who do not allocate to alternative investments showed “strong interest,” according to the survey, but highlighted lack of knowledge as a barrier, with 72% of respondents indicating they would invest in alternatives with better understanding, while 70% would do so on their financial advisor’s recommendation.
Financial advisors, meanwhile, see alternatives as a growth opportunity, with approximately 72% of respondents viewing alternative investment expertise as a key driver for business growth. In addition, 85% report enhanced client conversations about portfolio construction and 91% believe building knowledge in this area is worth it.
The survey also revealed a potential shift in client-advisor relationships, with 41% of high-net-worth investors considering switching advisors to gain access to high-quality alternative investments.
John Sweeney, the firm’s CEO, underscored the survey’s findings. “By developing and leveraging their alternatives expertise, advisors can differentiate their practice in the market, recruit new prospects, and deliver significant value.”
To support this trend, the company has launched The Alts Institute, a platform offering resources, strategies, and best practices for financial advisors to navigate the alternatives market effectively.
High-net-worth investors in the U.S. and Canada with a minimum of $2.5 million in investable assets, as well as financial advisors who manage an average of $633 million in assets, were included in the survey. Additional research was conducted in Singapore, Taiwan, and Hong Kong, suggesting a global interest in alternative investments.