Advisors are seeking resources to explain alternatives to clients

Advisors are seeking resources to explain alternatives to clients
Key takeaways
A critical need

Educating clients about alternatives is a key challenge for 44% of advisors surveyed by Cerulli.

Explaining illiquidity

Explaining the role of illiquidity in client portfolios is the most challenging alternatives education topic, cited by 49% of advisors.

Avoiding jargon

Prominent alternatives users also discussed the importance of using familiar terms to help ease clients’ understanding.

New research from Cerulli Associates shines a light on the need for education about alternative investments — 44% of advisors surveyed said that educating clients about alternatives is a key challenge. Of course, before advisors can educate clients on these investments, they need to educate themselves.

Advisor education

For practices that are considering offering alternatives but haven’t yet, it’s important to understand that there is a learning curve for advisors — but there are also plenty of educational resources to help them learn the ins-and-outs of alternative investments at both an asset class and structure level.

Advisors interviewed by Cerulli indicate that alternative product specialists/wholesalers and home offices are their preferred sources of education (54% and 49%, respectively). In terms of what types of materials are helpful, advisors gave top marks to granular education on alternative investments’ liquidity and general education on discussing alternatives with clients (48% and 47%, respectively). More specific asset class-level education is a close third.

Resources to help

  • In the Building Opportunities program, Invesco Global Consulting partnered with word specialist Maslansky + Partners to study the best language to use with accredited investors when introducing real estate investments.

Client conversations

Explaining the role of illiquidity in client portfolios is the most challenging alternatives education topic, cited by 49% of advisors. Educating clients on alternatives’ value proposition and overcoming administrative requirements round out the top 3.  Access the full study.

The processes and experiences of prominent alts users can serve as a roadmap for advisors who want to incorporate alternatives into their practice but can’t quite figure out how to present them to their clients. One theme highlighted in the research is that education permeates into most alternative investment discussions advisors have with clients.

 “The conversations we have are very tailored, and we try to weave an educational tilt into everything. [I find what works is] presenting them with a spectrum and explaining the pros and cons of each liquidity structure. Taking their temperature. Certain things resonate differently.”

—   Independent RIA advisor with $850 million in AUM

Prominent users also discussed the importance of using terms that clients are familiar with to ease the burden of understanding, instead of defaulting to alternative investments jargon.

Resources to help

  • The New Word Order program seeks to help financial professionals better connect with skeptical investors using the largest study ever done on the language of financial services.1
  • Investment real estate - not just offices gives an overview of the current fear that investors have in office real estate, and underlines opportunities in the non-office sector of the market- a much larger segment than the traditional office sector.



  • 1

    Study conducted by Invesco Global Consulting and Maslansky+Partners since 2007.

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Get the full report

This report leverages insights gathered from a Cerulli survey of more than 200 advisors on their use of alternative investments, as well as 25 research calls to gather qualitative insights from advisors. To request a copy, please complete the form.

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