Dipping a Toe In The Alternative Pool

Dipping a Toe In The Alternative Pool

Interested in finding new ways to diversify clients' portfolios, financial advisors appear to be ever-so-gingerly experimenting with alternative investments, new research by Rydex/SGI suggests. Their survey of more than 300 firms this year — 60 percent of whom had assets under management of less than $100 million — found that on average, advisors had placed some alternatives in about 80 percent of client portfolios, up from 71 percent in 2010. Only one in five advisors said they were unlikely to systematically recommend alternatives in the future (although that share was up from 15 percent last year); 38 percent said they had become “more comfortable” about recommending alternatives over the past two years. Rydex/SGI says clients themselves are growing more comfortable with alternatives, which helps support the advisors' choice of the investments for certain portfolios.

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