Research report

Reframing the role of alternatives

A study in partnership with InvestmentNews Research

January 23, 2020 | 20 minute read

Financial professionals and their clients are searching for ways to navigate these uncertain times, especially as many investors are planning for, approaching or in retirement. Alternative investments may help – and our recent survey shows both financial professionals and individuals are interested in increasing their allocations to alternatives but desire more education and better conversations.

FS Investments conducted a study in partnership with InvestmentNews Research to gain deeper insight on financial professional and investor goals and their knowledge of alternatives’ benefits, drawbacks and role in constructing diversified portfolios.1

Watch our video for the highlights and read the report to learn why education may be key to better investing outcomes.

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Reframing the role of alternatives

Key takeaways

  • Financial professionals aim to increase client allocations to alternatives from 5% to 10% over the next 3 years and the number of products used from 4 to 6.
  • Investors are open to alternatives and financial professionals believe alternatives can help meet investor needs. Yet conversations between the two about alternatives are not taking place.
  • The largest impediment to more productive client conversations about alternatives is likely a knowledge gap. Financial professionals disclosed they need more education on alternatives and believe their clients do as well.
  • Conversations between financial professionals and investors should focus on explaining “why alternatives” and portfolio applications for various asset classes and strategies.

  • FS Investments and InvestmentNews Research survey was administered through Qualtrics to a sampling of 864 individual investors between August 14, 2019 and September 6, 2019 and 342 financial professionals between August 22, 2019 and September 9, 2019. For their participation, financial professionals were offered a complimentary copy of the study and investors were eligible to enter a drawing for a chance to win one of five $50 Amazon gift cards.

This information is educational in nature and does not constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. FS Investments is not adopting, making a recommendation for or endorsing any investment strategy or particular security. All views, opinions and positions expressed herein are that of the author and do not necessarily reflect the views, opinions or positions of FS Investments. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. FS Investments does not provide legal or tax advice and the information herein should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact any investment result. FS Investments cannot guarantee that the information herein is accurate, complete, or timely. FS Investments makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

Any projections, forecasts and estimates contained herein are based upon certain assumptions that the author considers reasonable. Projections are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results. The inclusion of projections herein should not be regarded as a representation or guarantee regarding the reliability, accuracy or completeness of the information contained herein, and neither FS Investments nor the author are under any obligation to update or keep current such information.

All investing is subject to risk, including the possible loss of the money you invest.

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