Do advisers play a critical role in communicating the benefits of Alternative Investing?

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Do advisers play a critical role in communicating the benefits of Alternative Investing?

Do advisers play a critical role in communicating the benefits of Alternative Investing?

Here's an interesting article on The Ups & Downs of Alternative Investing focusing in the idea that it's so hard for investors to accept that alternative investments are supposed behave differently than traditional investments .

Throughout the article the author brings into focus the role advisers play in communicating the benefits of alternative investment.

When presented with the argument for including alternatives in a total portfolio, most investors are hypothetically fine with the potential return streams offered by such investments diverging from the traditional stocks and bonds paths. When both alternatives and traditional markets are on the upswing, investors don’t appear to second guess the directions their investments are taking. But, when the paths separate, and alternatives are on the downswing, or merely lagging the upward trend of traditional markets, suddenly the whole concept of having alternatives within a portfolio is up for discussion. While the following seems rather basic, much like athletes practicing their sport for hours to build muscle memory, these points can reinforce advisers’ persuasive mental memory of the role alternatives play in clients’ portfolios .

Advisers do play a critical role and are pressured to keep their clients committed to alternatives, and they have had a tough time combating with common investor concern regarding alternative investing. What do you think?

 

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2 Replies

Advisers may play a role but ...

Advisers may play a role but I don't think it is always critical. Most times investors already have their minds made up before seeking advise form consultants. They do so to show that due process was followed and for audit reasons

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Yes, I believe so, in ...

Yes, I believe so, in particular fund of fund managers and Investment portfolio consultants.

Published by Trudi Schifter, CEO at AquaSPE AG