Through interactions with over 300 broker dealer systems and meetings with over 5000 Financial Advisors (FA), we discovered, first hand that Alternative Investments (AI), at just around 4% of typical retail client portfolios, remain grossly under allocated.
This is in part because FAs lack sound means to quantify and demonstrate AI’s accretive portfolio benefits. Given mind boggling heterogeneity across 40 sub-types within real estate, private equity, hedge funds, liquid alternatives, managed futures, oil & gas, credit structures and fixed income substitutes, AI is poorly understood.
Moreover, AI given unique issues of inconsistent returns measurement, opacity, special risks, variable degrees of liquidity and usage of active management techniques within inefficient markets does not lend itself to conventional asset allocation methods. In order to place AI within client portfolios, FAs need a simple way to understand and to explain its benefits within the context of their particular clients; to allocate appropriately, as well as to access portfolio exposure by investing with the right set of manager funds.
DO IT NOW! BREAK DOWN THE WALLS BETWEEN ACTIVE & PASSIVE, LIQUID & ILLIQUIDS, TRADITIONAL & ALTERNATIVES