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A Self-Assessment Quiz

Alternative investments are sophisticated offerings with distinct differentiations when compared to traditional stock- or bond-based investments, such as: little to no correlation, lower volatility, consistent income distributions, potentially higher total return. Alternative investments also possess certain considerations that may make them less attractive when compared to traditional investments, such as: limited to no liquidity, less transparency, higher internal expenses, higher regulatory scrutiny, and greater arbitration risk.

As a fiduciary, you have a higher standard of care in determining whether these types of investments are in your client’s best interest. You must be willing to invest the time and energy in learning about how these investments work, what risks they carry, and when they should or shouldn't be utilized.

CLICK HERE to listen to a 20-minute podcast on the challenges RIAs face when adding a meaningful allocation to alternative investments.

 

To better understand if incorporating alternative investments into your practice is appropriate, please take our self-assessment quiz, which may help you gain some clarity: