Alternative investments have moved from the margins to the mainstream, according to insights from nearly 800 financial advisors surveyed in the fourth annual study conducted by CAIS and Mercer. The results reveal widespread adoption, with nine in 10 financial advisors (90%) currently allocating to alternatives, and 88% planning to increase allocations over the next two years.

According to the survey, nearly half of advisors (49%) now allocate more than 10% of client portfolios to alternatives, while three-quarters (74%) allocate at least 5%. The findings also revealed that alternatives are reaching a wider client base: four in five advisors (80%) serving non-accredited investors now allocate to alternative investments, underscoring the growing democratization of private market access. Advisors cited client education and suitability as top priorities to responsibly scale this next phase of adoption.

"This year's results send a clear message: advisor demand for alternatives isn't a passing trend, instead it's a structural shift," said Brad Walker, President of CAIS. "We're seeing advisors integrate alternatives as a core part of portfolio construction. As technology and AI continue to streamline access, we expect these allocations to deepen even further."

With growing demand for alternatives, advisors are increasingly focused on optimizing workflows. The majority of advisors (77%) prefer model portfolios to simplify alternative investing, while more than half (55%) regard analysis tools as their most valuable technology feature. Integrations (49%) and digitization (47%) followed closely behind, reinforcing the increasing role of technology and data-driven insights in advisor practices.

Despite the focus on digitization, responses indicate that advisor learning remains human-led. Personal interaction, through one-on-one meetings and live events, remains the preferred approach for advisors exploring opportunities in altern......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.