Alternatives ‘no longer mainstream for investors’

Alternatives ‘no longer mainstream for investors’

Providers are not prioritising alternative investment products, as advisers and their clients look for less-expensive equity products, Pamela DeBolt has said

The associate director of Cerulli Associates said: “As investors continue to look for ways to diversify their portfolios and take advantage of less expensive equity products, asset managers are planning to develop products to match investor demand.”

Research from Cerulli Associates, Products and Strategies 2015: Building Innovative Product Solutions in a Complex Environment, examined the retail and institutional product strategy of asset managers across different asset classes and products, such as exchange-traded funds.

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It also gauged views from financial advisers on products and portfolio construction decisions.

According to the study, asset managers have been building out their international and global capabilities.

“US investors have typically turned to international and global investment products for further diversification and retail managers are allocating more of their product development resources over the next year to international/global equity,” she added.

Adviser View

Bob Wilson, financial adviser at Norwich-based GreenSky Wealth, said: “I can understand why people are turning away from alternatives. We prefer investments that add value every day and do not provide a bumpy ride.

“We sometimes do not understand how they work so are not comfortable enough to sell them to clients. They are also not always transparent and we have seen clients who have lost money in them. You can find as good returns in other asset classes.”