High-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals have historically allocated minimal portions of their portfolios to alternative investments. However, this untapped market is rapidly becoming a focal point for wealth managers seeking to diversify client portfolios and enhance returns. Currently valued at approximately $11.7 trillion as of mid-2022, the alternative investment market is projected to grow to an estimated $23 trillion by 2030, driven by advancements in investment technology, evolving client preferences, and supportive regulatory changes. These developments position alternative assets as a cornerstone of the future wealth management landscape.
Breaking Down Barriers
Once the domain of institutional investors, alternative investments are becoming more accessible to wealthy individuals. Innovations in fund structures, such as semi-liquid investment vehicles, are lowering barriers to entry, allowing family offices and HNW individuals to access previously illiquid assets like private equity and real estate. These changes echo a broader trend of democratizing private markets, supported by regulatory advancements such as the European Long-Term Investment Funds regulation (Eltif).
At FINIQ, we recognize these trends and have tailored our platform to meet the evolving needs of wealth managers. The newly launched FINIQ Alternatives Market provides access to a diverse range of curated opportunities, including private debt, venture capital, and structured investments, enabling wealth advisors to elevate their client portfolios with high-quality options.
A Vast Untapped Opportunity
Individual investors account for 54% of global assets under management (AUM), yet their allocation to alternatives remains disproportionately low. According to Bain’s 2023 analysis, UHNW investors hold 22% of their wealth in alternatives, while HNW portfolios reflect a meager 3% allocation or less. This disparity highlights a significant opportunity for wealth managers to educate their clients on the value of alternative investments and bridge this gap.
FINIQ is uniquely positioned to address this opportunity. By offering tailored solutions, robust client support, and advanced technology integrations, such as automated workflows and custodial integration. FINIQ simplifies the complexities of alternative investment management.
Growth Drivers for Alternatives
Demand for alternatives is driven by the need for portfolio diversification and better returns amid uncertain equity and bond markets. Private markets’ AUM reached $11.7 trillion in mid-2022, and estimates suggest the wealth channel will contribute $500 billion to $1.3 trillion to this asset class by 2025. To capitalize on this growth, wealth managers must overcome challenges such as client education, illiquidity concerns, and operational hurdles.
FINIQ empowers wealth managers to address these challenges through its comprehensive suite of services, including:
- Origination and Due Diligence: Ensuring only high-quality funds are offered.
- Lifecycle Management: Providing seamless investment processing and client reporting.
- Dedicated Sales Support: Offering personalized assistance for wealth managers and their clients.
The FINIQ Solution: FINIQ Alternatives Market
FINIQ’s fintech-enabled investment platform, supported by over 120 financial professionals, delivers a cohesive experience for wealth managers. By integrating advanced technology with unparalleled market expertise, FINIQ Alternatives Market simplifies the complexities of alternative asset management and enables advisors to focus on building stronger client relationships.
Learn More About FINIQ Alternatives Market
Partner with FINIQ
Wealth managers looking to unlock the potential of alternative investments can rely on FINIQ to provide tailored solutions and robust support. Explore the FINIQ Alternatives Market to access curated opportunities and elevate your clients’ portfolios.
Contact us HERE or email us at info@www to learn more about how FINIQ can help you stay ahead in the competitive wealth management landscape.
References
- Global News Wire – https://www.globenewswire.com/news-release/2024/09/18/2948056/0/en/Global-alternatives-markets-on-course-to-exceed-30tn-by-2030-Preqin-forecasts.html?utm_source=chatgpt.com
- Bain & Company – https://www.bain.com/insights/why-private-equity-is-targeting-individual-investors-global-private-equity-report-2023/?utm_source=chatgpt.com
Disclaimer: The FINIQ Alternatives Market is an alternatives investment platform intended for use by financial professionals only. Access is restricted to registered investment advisors, broker-dealers, and other qualified institutional investors.
