Are your high-net-worth clients slipping through your fingers because you lack access to alternative investments? You might think, “Not my clients.” But what if I told you that 62% of high-net-worth investors bypass their primary wealth managers to invest into alternatives?1
Yes, you read that right.
This is a wake-up call. I recently heard how it is playing out on the ground when an RIA leader confessed that his firm’s client base could unravel without a robust alternative investing experience. The risk goes beyond losing a few clients—it potentially threatens the core of your business.
The good news? The tools and platforms offering seamless access to alternatives can be at your disposal. The problem isn’t that clients aren’t interested—it may be they don’t know you can guide them there. And maybe, just maybe, you haven’t initiated the conversation because you’re concerned about the operational burdens.
But with the latest advances in fintech, particularly in alternative investment platforms, those burdens are evaporating. If you’re not yet using alternatives in your business, I believe it’s time to consider doing so.
The Data Speaks: Why You Can’t Ignore Alts
Let’s talk numbers. Global alternative assets under management (AUM) are expected to soar to $24.5 trillion by 2028, up from $16.3 trillion in 2023.2 In the US alone, alternatives AUM in wealth management is projected to increase by $152 billion this year.3 This momentum presents a potential opportunity to financial advisors—one that could add billions to your AUM.
What is behind this? Public markets are shrinking. The number of publicly listed companies has halved since the mid-90s,4 while private equity-backed companies have exploded to over 11,200 from 1,900 over the past two decades.5 The investable universe is shifting also to include private markets, and with that shift, the demand for alternative investments is rising.
This appears to be a structural change. We’re seeing a redefinition of what it means to manage wealth effectively. Alternatives are no longer a niche—they’re becoming part of the portfolios of the next generation of high-net-worth investors.
Client Expectations and Demographics Are Evolving: How Are You Keeping Up?
A new wave of investors who prioritize diversification, personalization, and digital convenience is challenging traditional approaches to wealth management.6 They want experiences that meet their unique needs and solutions that are as personalized and intuitive as those from any top-tier consumer brand. They expect high levels of personalization and digital convenience. In turn, it is paramount for financial advisors to have access to technology, innovations, and tools to empower them to meet the demands of a rapidly evolving market and investor base.
Here’s a critical point: 93% of high-net-worth investors aged 21 to 43 plan to increase their allocations to alternatives.7 These aren’t just clients—they’re likely representatives of the future of wealth management investors. The great wealth transfer is upon us, with $84 trillion moving to younger generations.8
Though, it seems younger investors are not easily finding the experiences they want within wealth management. 77% of North American financial advisors have reported losing business due to inadequate technology,9 which underscores the importance of the technology financial advisors use to support their client experience.
Technology makes an enormous difference in addressing the challenges younger high-net-worth investors bring to the fore. They don’t just want alternatives—they expect them.10 Advisors have an opportunity to adapt to these new investor demands and be at the forefront of the industry, going beyond the status quo by embracing technology and new client preferences.
The Technology Race: Don’t Get Left Behind
The wealth management industry has been slow to adopt the technology that can drive these improved experiences. But that’s changing—fast. IT investments in cloud technology are projected to grow by 9% annually through 2028, with wealth management leading the charge.11 And AI? It’s not a buzzword; it’s the future. As many as 94% of asset management CFOs are leveraging AI to enhance operations.12
The right technology enables firms to scale, adapt, and innovate at a pace that meets investor demands.
At CAIS, we’ve pioneered breakthroughs that have transformed the alternative investment landscape. Our platform supports advisors, offering access to hundreds of funds across diverse asset classes. The value we bring lies not just in simplifying access to alternatives, but in mastering the complexities that come with it—whether it’s automating operational processes, or enhancing data accuracy. Our technology allows advisors to focus on what matters most: spending more time with clients, aiming to deliver better portfolio outcomes, and winning new business.
These advancements are transforming the advisor-client relationship. They enable advisors to meet the expectations of high-net-worth clients while maximizing productivity and impact.
The "How" of Alts: Execution is Everything
Advisors already understand why alternatives matter. The focus now is on how to implement them seamlessly and effectively. If you’re not where you need to be, don’t worry—you’re not alone. The industry is evolving, and we’re all in this together.
The how of alternatives is where the rubber meets the road. Implementing alternatives requires the right technology, the right tools, the right partners, and the right mindset. It’s about employing the technology that helps advisors generate a positive experience for their business, considering the goals and outcome expectations of their client base.
As we look to the future, one thing is clear: alternative investments are not just an option—they’re a necessity. The advisors who embrace this reality will be better positioned to thrive in the years to come.
