Attracting new shoppers is the highest purpose U.S. monetary advisors add different funding choices to their portfolios, in keeping with the 2025 iCapital World Advisor Survey launched this week.
Nonetheless, advisors say that challenges assessing the liquidity of the investments and understanding their affect on the general portfolio stay the highest challenges to broader adoption.
The survey included responses from 603 registered monetary professionals throughout 9 international locations and located that advisors strongly favor personal fairness, personal credit score, hedge funds and actual property amongst different funding choices.
Greater than half of the surveyed advisors stated they have been occupied with placing their shoppers’ cash in personal fairness or personal credit score, at 66% and 54%, respectively. One other 54% have been occupied with hedge funds, and 44% in actual property. Curiosity fell off significantly, to 26% of advisors, when it got here to investing in enterprise capital and different actual belongings (21%).
The vast majority of advisors (77%) additionally count on that inside the subsequent two years, evergreen funds will account for 11% to fifteen% of their shoppers’ portfolio allocations. One other 22% forecast an evergreen allocation of between 5% and 10%.
The primary problem in advisors’ adaptation of options stays the problem of precisely assessing liquidity and different dangers, with 55% citing these elements.
One other 53% talked in regards to the challenge of understanding how different allocations will affect general portfolio development.
About half (51%) famous the restricted amount of each institutional-grade different funding choices and mannequin portfolios that incorporate options that they will entry. Forty-eight p.c pointed to considerations round compliance, and 42% cited a scarcity of fundamental schooling round options.
Much less cited challenges embody consumer reporting (20%) and documentation/due diligence (13%). A further 13% pointed to investor eligibility requirements, and 11% cited restricted or no entry to funding choices within the class.
Solely 10% of advisors discovered the merchandise’ complexity to be a barrier to wider adoption.
A 3rd-party analysis agency performed the survey on behalf of iCapital within the first quarter of 2025. The survey was performed by way of cellphone interviews, with on-line follow-ups. It included responses from 603 professionals throughout the personal wealth, dealer/supplier and RIA channels.