Part 1: A Growing Place in Clients' PortfoliosPart 1: A Growing Place in Clients' Portfolios

Advisors of all types expect investment in alternatives to grow by 2016. On average, advisors say 31% of their client portfolios include alternative investments today. They expect that figure to grow to 40% by 2016—an increase of nearly one-third. 

RIAs tend to invest in alternatives more frequently than advisors in other channels. Advisors at insurance firms and bank brokers currently are least likely to use alternatives, with less than a quarter of their client portfolios holding alternative investments. Yet advisors in these channels expect to see substantial growth, with more than a third of their portfolios expected to include alternatives by 2016.

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Advisors say their client portfolios that hold alternatives have an average allocation of 14% today. They expect the figure to grow to 18% by 2016—an increase of almost 30%. Those expectations are roughly consistent across channels, suggesting that advisors across the industry are largely united in their perspective on alternatives’ appeal.

Next Part 2 of 5: The Rationale for Alternatives

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