For the August installment of Chronicles, CAIA explores the growing demand for access to alternative assets within the world of wealth management. This month, Aaron Filbeck, Head of UniFi by CAIA™, speaks with Scott Reeder, Managing Director, US Wealth Advisory, Blackrock (and a UniFi by CAIA™ advisory council member). The two discuss major trends to watch, how to effectively promote education and transparency and, as products become more widely available, what the industry can do to ensure the best possible outcome for clients.
Sticking with perspectives from the wealth management space: As the possibility of a recession looms, financial advisors are sharing mistakes and advice from prior recessions while also unpacking how alts can be an ideal place to find less volatility. Check out complete coverage from WealthManagment.com.
Let’s also check in with another UniFi by CAIA™ advisory council member: Phil Huber, CIO for Savant Wealth Management, discusses the outperformance of several alternative asset classes in 2022. In a recent blog post entitled “The Paper Trail: Breaking Beta”, he notes that: “Managed futures, catastrophe reinsurance, and direct lending - to name a few - have been delivering solidly positive returns this year in what can only be described as a challenging environment for beta-driven portfolios.”
And, amid ongoing volatility across stocks and bonds, the case for placing alts at the center of your portfolio grows even stronger. Dan Weil of TheStreet further illustrates the appeal of alternative investments here.
We also have a wealth of knowledge from a Cerulli Associates survey. As covered by CNBC, the results show that: “After battling downturns in the stock and bond markets, more advisors are turning to alternative investments. Cerulli sees a ‘Goldilocks moment’ for these assets amid demand for income, higher returns and volatility protection as more products become available.”
Let’s also take a moment to explore the importance (and true significance) of internal vs. external benchmarking. Recently, in the Collaborative Fund blog, Morgan Housel – a partner at Collaborative Fund and a former columnist for The Wall Street Journal -- writes that: “Last year, I had dinner with a financial advisor who has a client that gets angry when hearing about portfolio returns or benchmarks. None of that matters to the client; All he cares about is whether he has enough money to keep traveling with his wife. That’s his sole benchmark.” Read more here.
Don’t forget to join us for an executive leadership team-up with CAIA CEO Bill Kelly and Dr. Mehrzad Mahdavi, Executive Director for the FDP Institute, where they will discuss Natural Language Processing and implications for financial services:
Session 1: https://bit.ly/3Q7zl1M
Session 2: https://bit.ly/3zrDAP6
