Across channels, advisors see two primary obstacles to using alternative investments: lack of liquidity, and fees and expenses.
Concerns about liquidity rise sharply among advisors who choose not to invest in alternatives: 71% of these advisors say lack of liquidity is an obstacle. Meanwhile, advisors in certain channels feel more strongly about different obstacles. For example, more than 40% of RIAs are concerned about the lack of a track record for alternatives. Meanwhile, bank brokers and advisors at insurance firms may not feel well informed about alternatives: More than half (54%) say they need information to help explain alternatives’ benefits and risks to clients, while two in five say the level of education from the investment management firm is problematic.
Click to EnlargeNext Part 4 of 5: Defining Alternatives