PPB Capital Partners based their survey findings on the responses from 130 wealth advisers.

In a blog in January, PPB Capital Partners (PPB), a provider of alternative investment solutions, said it was “surreal” that equity markets were seeing all-time highs right in the middle of a pandemic. But the unprecedented price movements and dramatic volatility, coupled with near-zero rates had wealth advisers in a bind. As a result, advisers were reaching out to PPB in their search for the twin goals of uncorrelated return streams and income. PPB is now out with a survey that ascertained advisers’ views on alternative investing in 2021.  (PPB Capital Partners)

Key findings

• Nearly 83% of respondents were RIAs
• About 50% of respondents managed assets in the range of $1B – $5B
• 45% of advisers said more than half of their clients owned alternatives
• 35% (the largest chunk) of advisers said that clients allocated between 5%-10% of their portfolio to alternatives
• The main objectives for allocating to alternative investments were to reduce risk, enhance returns, earn uncorrelated returns as a hedge, and diversification
• About 45% said clients’ allocation to alternatives over the next 12 months would increase; however, 53% said it would stay the same
• 85% said the increase would in the range of 5% to 10%
• Main roadblocks for investing in alts: Lack of liquidity (53%); lack of understanding (45%); Long lock-ins (46%); K-1 tax reporting (40%)

Implementing alternative investments

Brendan Lake, PPB’s Founder and CEO, said that the results were significant. Nearly 50% of wealth advisors said over half of their clients owned alternative investments.

However, “implementing alternative investments can present operational challenges for wealth advisors and their clients,” Lake added.

Indeed, 54.2% of advisers said in the survey that the largest obstacle in this regard was the inadequate resources available for manager due diligence. Another 39.3% said the subscription process was a challenge.

“While PPB uses technology to simplify and streamline the investment and operational processes, including electronic subscriptions, we believe that human connections matter,” commented Lake. “We prioritize personalized support to wealth advisors looking to allocate to alternative investments through our platform.”

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