Advisor recommendations of alternative investments have more than doubled in just four years, according to a survey Fred Hubler cites, jumping from 25% in 2020 to 55% in 2024. Still, he notes some holdouts remain: 24% of survey respondents hadn’t recommended a non-traded alternative product in the prior year.
Hubler breaks down what’s driving advisors toward alternatives, in order of importance: 87% cited diversification, pointing to the non-correlation alternatives offer versus the stock market, even though textbook assumptions about bonds rising when stocks fall don’t always hold up in practice. 64% cited growth potential, often through “aggregation strategies” that combine smaller assets into a larger, more efficient portfolio later sold to a bigger buyer. 60% cited income, especially valuable now that cash yields 4-5% and alternative income products need to clear a higher bar. 42% pointed to positive prior experience with alternatives, and just 7% cited ease of business, which Hubler argues isn’t actually a good measure of a strong alternative investment.
One number stands out: alternative investment recommendations more than doubled in four years, a shift that’s hard to ignore no matter which side of the debate an advisor is on.
Explore the full survey results on Forbes: What’s All The Buzz About Alternative Investments?