Alternative Investments Up 8 Per Cent In 2022 – Broadridge Survey

Amanda Cheesley Deputy Editor October 21, 2022

Alternative Investments Up 8 Per Cent In 2022 – Broadridge Survey

A bi-annual survey of 400 financial advisors was released this week by New York-listed fintech firm Broadridge Financial Solutions.

A survey by Broadridge Financial Solutions finds that advisors are increasingly leaning on private funds and alternative investments amid volatile equity and bond markets.

According to the survey, 67 per cent of advisors reported using private fund and alternative investment products in the third quarter of 2022, compared with 59 per cent in the first quarter of 2022, and 52 per cent of users are planning to increase usage over the next two years. 

Preqin also stated that private market investing has risen in scale relative to public listed equities over the past two decades and, since the 2008 financial crash, the trend has accelerated. 

At the end of December 2021, total private capital assets under management for funds focused on North America stood at $5.56 trillion. In December 2008, AuM was around $1.41 trillion, Preqin said

The survey by Broadridge finds that diversification is the most common reason why advisors are using or considering such products (76 per cent cite that as a top reason), followed by non-correlation with equity markets (69 per cent).
However, the survey shows that only 27 per cent of financial advisors who use or plan to use alternatives are very satisfied with the private funds and alternative investments products and resources available through their firm, while 16 per cent report dissatisfaction overall.
Matthew Schiffman, principal of distribution insight at Broadridge Financial Solutions, said: "Asset managers are not adequately meeting financial advisors' needs, despite an understandable surge in demand against the backdrop of volatile public markets." 

"We see this as a strong, long-term opportunity for asset managers to showcase their value by providing product options that meet the growing demand for alternative investments among retail investors," he added.
As advisors seek diversification, many also express that they do not view cryptocurrency as a viable option, the survey shows. Instead, financial advisors report using alternatives such as real estate and real estate investment trusts (70 per cent), commodities (39 per cent), and private equity and venture capital (35 per cent). Use of cryptocurrency is at just 5 per cent, unchanged since Q1 2022, the survey adds. See previous articles about the firm here.

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