Advisors are looking to adopt alternative investments in their portfolios but are leaning on guided strategies from fund firms to do so, according to a new survey by Jackson National Life Insurance Company.
Specifically, the survey revealed that nine out of 10 advisers expect to increase their use of alternative asset classes over the next year. Among those advisers who anticipate an increase, more than half said they would increase their use of alternatives by 15% or more in the next 12 months. Nearly a third will boost their use of alternatives by 20% or more. Of the small percentage of advisers who have not used alternative asset classes to date, more than 90% say they are now considering using them.
However, the survey also revealed that practical use of alternatives was not as clear among advisors, who said that guided strategies from product providers will play a key role in their use of alternatives. In fact, more than 95% of respondents said that guided strategies would be very or somewhat important in their construction of client portfolios. Nearly four out of five advisers said they would be more likely to use alternatives if offered within a guided strategy.
“Portfolio allocation strategies are evolving beyond the traditional 60/40 model,” stated Clifford Jack, executive vice president and head of retail for Jackson. “As financial advisers adapt to these new strategies and rely more on alternative asset classes, product providers must offer the tools and resources they need to meet these demands. The advisers who took part in this survey made it very clear that guided strategies could play an important role in that effort.”
The survey was conducted in March 2012 and responses were received from 2,190 advisers.