ORLANDO, Fla., June 4, 2015 /PRNewswire/ -- The majority of
advisors intend to continue recommending alternative investments
over the next year, yet believe the asset class has underperformed
since the economic crisis, according to a new survey from Pershing
LLC, a BNY Mellon company. The study, Help or Hype: Advisor
Perceptions of Alternative Investments, which was released
today at Pershing's INSITE™ 2015 conference, is based on a recent
survey of 1,200 advisors conducted by Pershing in conjunction with
Beacon Strategies LLC, along with interviews with advisors,
broker-dealer firms, registered investment advisors (RIAs) and
alternative investment managers.
"Alternative investments continue to interest all investors,
from ultra-high-net-worth and high-net-worth investors to the mass
affluent," said Justin Fay, vice
president of investment solutions at Pershing. "Though some
lingering skepticism exists about alternatives, largely due to
recent lukewarm performance, we are seeing strong flows into this
asset category. The findings of our study suggest that most
advisors are optimistic about the ability of alternatives to
deliver diversification benefits over time."
According to the survey, most advisors' primary goal in using
alternative investments is to reduce volatility and diversify their
client portfolios. Advisors who were surveyed indicated that 73
percent of their clients have at least one type of alternative
investment in their portfolios.
The survey also found that:
- 70 percent of advisors plan to maintain their current
alternative investment allocation recommendation for clients over
the next twelve months
- However, almost half of advisors surveyed feel that alternative
investments have underperformed since 2008
- More than half of advisors (55 percent) surveyed believe that
clients should allocate 6 to 15 percent of their portfolios to
alternative investments
- 56 percent of respondents see value in allocating illiquid
alternatives to investor portfolios
- The principal drivers of product selection are the experience
of the alternative investment manager and diversification
options
- The majority of advisors who do not currently recommend
alternative investments to clients cited product expense, along
with disagreement over the viability and basic premise of
alternative investments
Broker-dealers and large RIAs who took part in the survey
identified operational issues as an area of concern with regard to
alternative investments–specifically with regard to processing,
pricing/time to settlement, tax reporting and regulation.
"The findings of the study indicate that communication, product
understanding and improvements to operational processes will be
critical to mitigating these challenges," said Fay. "In response to
the need for more education and training in the use of alternatives
among advisors, Pershing launched the Alternative Investment Center
last year. Through the center we provide advisors educational
resources, research and solutions to position advisors to serve the
needs of their clients seeking alternative strategies.
Additionally, we recently introduced Online Order Entry to Entry to
improve transparency and address the inefficiencies of manually
placing orders."
Pershing LLC and Beacon Strategies conducted the alternatives
survey over the course of two months in the winter and spring of
2015. Simultaneously, expansive interviews with financial advisors,
RIAs and broker-dealer firms and alternative investment fund
managers addressed both quantitative and qualitative aspects of the
underlying research.
To download a copy of the full whitepaper, visit
https://www.pershing.com/our-thinking/thought-leadership/.
About Beacon Strategies, LLC
Beacon Strategies, LLC is a premier research and consulting firm
that specializes in technology developments for the financial
services industry. Founded in 2006, the firm focuses on strategic
and tactical decisions that banks, broker-dealers and financial
advisors increasingly face in an increasingly fast-paced and
hyper-connected business environment. Beacon Strategies delivers
critical thought-leadership insight in print, in person and online
through publications, website content, consulting assignments and
industry-leading conferences and events.
About Pershing
Pershing and its affiliates provide global financial business
solutions to advisors, asset managers, broker-dealers, family
offices, registered investment advisor firms and wealth managers. A
financial services firm located in 23 offices worldwide, Pershing
provides business-to-business solutions to clients representing 5.8
million active investor accounts on the U.S. platform. Pershing
affiliates are members of every major U.S. securities exchange, and
its international affiliates are members of the Deutsche Borse,
Australian Stock Exchange, Irish Stock Exchange, London Stock
Exchange and Toronto Stock Exchange. Pershing LLC (member
FINRA/NYSE/SIPC) is a BNY Mellon company. Additional information is
available on pershing.com, or follow us on Twitter @Pershing.
About BNY Mellon
BNY Mellon is a global investments company dedicated to helping
its clients manage and service their financial assets throughout
the investment lifecycle. Whether providing financial services for
institutions, corporations or individual investors, BNY Mellon
delivers informed investment management and investment services in
35 countries and more than 100 markets. As of March 31, 2015, BNY Mellon had $28.5 trillion in assets under custody and/or
administration, and $1.7 trillion in
assets under management. BNY Mellon can act as a single point of
contact for clients looking to create, trade, hold, manage,
service, distribute or restructure investments. BNY Mellon is the
corporate brand of The Bank of New York Mellon Corporation (NYSE:
BK). Additional information is available on www.bnymellon.com, or
follow us on Twitter @BNYMellon.
CONTACT:
Cassandra
Osei
+1 551-222-5046
cassandra.osei@pershing.com
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SOURCE BNY Mellon