UniFi by CAIA Crossing the Threshold - 8

Despite our entire industry's energy, conversations, and conferences seeming to focus on
alternatives, allocations for individual investors as a percentage of net worth are still low
relative to institutions. Further, these allocations decrease the farther " down market " you
go, with mass affluent allocations averaging very close to zero. Given all the industry's
efforts, it would seem like adoption would be much higher. How can we help investors
think through diversification more wholesomely and implement diversified portfolios more
systematically?
In Part 2: Crossing the Threshold: Forging Alliances, Navigating Challenges, and
Recognizing Opportunities, we've enlisted the help of industry thought leaders to guide
you along the journey from ideation to implementation:
Fran Kinniry, CFA, principal and head of the Vanguard Advisor Research Center (and
creator of the private equity program at Vanguard) starts with some of the most
important considerations you should make before beginning the journey towards
allocating alternative investments in Asking Important Questions: Determining Client
Appropriateness. Factors that play into these considerations include the client's
risk tolerance, liquidity profile, and tax implications, as well as assessing your own
resources, capacity, competency, and access to investment opportunities.
Once you've addressed some of these questions, Sylvia Kwan, PhD, CAIA, CFA, chief
investment officer of Ellevest, puts the investor front and center in A Better Way
Forward: Aligning Portfolios with Goals. Alternative investments may be an interesting
intellectual exercise, but it's important to start with " why " and focus on the purpose
these strategies play in achieving investor outcomes. Diversification, income, growth,
inflation protection, and positive impact should be the " true north " of building multiasset
portfolios, and alternative investments are no different.
Finally, Shannon Saccocia, CFA, CIMA, chief investment officer of NB Private Wealth,
walks through some important implementation objectives in Overcoming Obstacles:
Implementing an Alternative Investments Allocation. Once you've determined that
alternative investments are an important piece of the portfolio, the next step is to bring
investors along on the journey, articulate its value proposition, and address important
questions and behavioral preferences and tendencies. Finally, it's important to set
appropriate expectations to ensure investors focus on the long-term.
We finish up this practical guide in Part 3: The Return Journey: A New Path Forward
with a three-part call to action and best practices to begin the implementation process of
alternative investments. They include emphasizing strategic and long-term approaches,
prioritizing the purpose of product labels, and fostering an " alternatives culture " .
Throughout this guide, you'll see that making the investment case is just the beginning.
Several additional steps must be taken to move from ideation to implementation. By
the end of your journey, you should have better context for the direction of alternative
investments in the wealth management industry, multiple frameworks for determining their
appropriateness for clients, and how to begin the integration process.
8 EXECUTIVE SUMMARY
UniFi by CAIA Crossing the Threshold

Table of Contents for the Digital Edition of UniFi by CAIA Crossing the Threshold
