Current market conditions and economic uncertainty are causing advisors to consider diversification into alternative investments.
According to InvestmentNews, the trend is moving away from traditional, long-only stock and bond exposure. Advisors should consider "how much of alternative investments should they incorporate into their client's portfolio", says Thomas Balcom, the founder of 1650 Wealth Management. He currently allocates more than 50 percent weightings to alternatives.
A recent report by Clearwater Analytics likewise highlights the current alternative investments trend. Private credit, private equity, and real estate represent the most popular alternative strategies among the survey respondents, with roughly 70 percent reporting some allocation to those strategies. The survey also inquired about the appeal of alternatives, and diversification is listed as the top benefit, in front of yield and returns.
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