Retail access to alternative investments The most important thing for financial advisers, a CAIS study finds

NEW YORK–(BUSINESS CHP) – Market volatility, rising interest rates and a growing lack of confidence in strong returns in public markets have led to a surge in demand and access to alternative asset classes, according to a recent independent study conducted by the CAIS at the 2022 Morningstar Conference. In addition, more than eight out of 10 (80.9%) financial professionals believe that all retail investors should have access to such investments.

Public market assets are generating some of the lowest annual results for the 60/40 portfolio in 20 years.1 More than a third of respondents (33.6%) believe that the traditional combination of stocks and bonds is no longer effective for investing, while another 42% say the 60/40 portfolio is not as effective as it used to be. Among respondents who identify as investment or financial advisers, 84% say they recommend clients who meet the requirements of accredited investors to allocate alternatives.

“As traditional assets face muted expectations, alternative investments can provide a diversified method for investors who want to hedge against increased volatility and potential increased returns, said Matt Brown, CEO and founder of CAIS. “These survey results confirm our discussions with the independent wealth management community, highlighting the growing urgency to access alternative products. CAIS responds to this call by providing connectivity and education that counselors can use to meet this demand. ”

The study gathered insights from more than 300 registered investment advisers, financial advisers and other investment industry experts attending the leading annual conference in Chicago. His findings also draw the attention of the entire industry to the definition of an accredited investor – a long-standing threshold for access to alternative asset classes. Almost three quarters of respondents (74.9%) believe that the SEC’s definition of an accredited investor needs to be updated. Among them, 43.6% say that the definition is too strict, and 41.4% believe that the income threshold for individuals should be lowered. Only 11.5% think the definition is too weak.

Strict qualifications are not the only obstacles that participants say investors face when seeking access to alternative asset classes. Almost seven out of 10 respondents (68.98%) indicated a lack of education about alternatives as an obstacle to investing in them. Respondents also cited high levels of administration and documentation (37.6%) and concerns about due diligence and compliance processes (34.3%) as difficulties in allocating funds.

““As retail-rich alternative products hit the market quickly, financial advisers can reassure themselves by ensuring they have the necessary knowledge of these complex products, giving them confidence to recommend alternatives to their clients,” he said. Abby Salame, CMO and Managing Director of CAIS IQ, an educational platform at CAIS. “While access to quality strategies is important, we believe that leadership through learning can be the key to unlocking their full potential. ”

Respondents to the survey believe that private equity (49.8%), real estate (38.9%) and private credit (33%) are the three alternative asset classes that are likely to surpass the market in 2022. Alternative assets to account for up to 24% of the global investment market by 2025, compared to 12% in 20182.

Research methodology

The study was conducted May 16-17 at the Morningstar 2022 Investment Conference in Chicago, Illinois. Respondents attended the event, including the RIA, financial advisers and other investment industry experts. The data is based on the answers of 303 respondents, 107 of whom identify as financial advisers.

About CAIS

CAIS is the leading alternative investment platform for financial advisors seeking better access and training for alternative investment funds and products. CAIS provides financial advisors with a wide range of alternative investment strategies, including hedge funds, private equity, private loans, real estate, digital assets and structured notes, enabling them to take advantage of opportunities and / or sustain ever-changing markets. CAIS also provides an industry-leading training system, CAIS IQ, to help counselors learn faster, remember longer, and improve customer outcomes.

All funds listed in CAIS undergo independent due diligence and ongoing monitoring by Mercer. Mercer Diligence reports and fund ratings are available to advisors on the password-protected CAIS platform. CAIS streamlines the end-to-end transaction process through digital subscriptions and integrated reporting with Fidelity, Schwab and Pershing, making investing in alternatives easy.

Founded in 2009, CAIS, a leader in fintech technology, enables over 5,300+ unique consulting firms / teams that control more than $ 2.5 t + in network assets. From the beginning, CAIS has facilitated over $ 17B + transaction volume as the first truly open market where financial advisors and asset managers engage and execute directly on a huge scale. CAIS has offices in New York, Los Angeles, Austin and San Francisco.

Securities offered through CAIS Capital LLC, a member of FINRA, SIPC.

1 HFR, Venn as of April 2022, portfolio 60/40, represented by the S&P 500 and the Bloomberg Barclays Aggregate Bond Gross Index.

2 Chartered Alternative Investment Analyst Association, April 15, 2020

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