Alternative investments continue to gain traction in client portfolios, yet many issues arise not from the investments themselves but from the process used to recommend them.
This insight introduces a practical “pre-flight checklist” for advisors before allocating capital to alternatives. It outlines five critical areas that should be addressed prior to any recommendation: product due diligence, client suitability, portfolio fit, documentation and compliance, and the client conversation.
The framework emphasizes understanding true return drivers, reviewing realized track records, assessing liquidity constraints, and ensuring the investment plays a clear role within the broader portfolio. Just as importantly, it highlights the importance of documenting suitability and ensuring clients fully understand fees, risks, and lock-up structures.
By following a structured evaluation process, advisors can better align alternative investments with client objectives while reducing the risk of unsuitable allocations.View Full Report