UK Retail Investor Advisers See Alternative Investments Gaining Momentum
New research commissioned by Liverpool, UK-based Seneca Investment Managers shows 96% of U.K Independent Financial Advisers (IFAs) - those who advice retail investors on their investments - believe alternative investments should be a key part of a client's overall asset allocation.
Many of the survey respondents felt alternative investments offer a good hedging tool against capital/stock markets (58%); clear diversification benefits (58%) and the ability to generate alpha (52%). Liquidity risk is one of the issues that keep IFAs from recommending alternatives, however; one-third of respondents offered this as a reason to stay away. Education remains a challenge, with nearly 40% of respondents saying that didn't have enough understanding of the products on offer to be able to make a recommendation to a client.
Steve Hunter, Head of Business Development, Seneca Investment Managers, said: “Correlations between traditional asset classes have increased; institutional investors recognised the benefits of alternatives a long time ago, so it’s good to see the retail market catching on to the benefits of diversification as risk levels sharpen.
“Alternative investments have become more common in investor portfolios but the challenge of accessibility relative to more traditional assets remains. Investment Managers with a long track-record and intrinsic and disciplined approach to real assets and alternatives selection can provide investors access in an efficient way that can support their overall investment objectives.”
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