ALTSMI: RIAs Lag Behind Wirehouses in Alternatives Adoption

Core Insights - RIAs are lagging behind wirehouses in adopting alternative investments for clients, with significant differences in client allocations and operational support [1][3][4] RIA Client Allocations - National RIAs report that 29.9% of their clients hold alternative investments, with a weighted average allocation of 11.2%, implying that 3.35% of client assets are allocated to alternatives [2] - The broader RIA market shows an implied client allocation to alternatives at just 0.78%, significantly trailing wirehouses and broker/dealers [3] Wirehouse and Broker/Dealer Performance - Wirehouse clients have the highest implied allocation to alternatives at 3.75%, with a high average weighted allocation of 16.1% [4] - Independent broker/dealers report that 8.7% of their clients have allocations to alternatives, with an average allocation of 13.4%, surpassing the RIA segment [5] Future Expectations - Committed national RIAs expect to increase their share of clients with alternative investments to 35% by 2026, while wirehouses anticipate reaching 29% and independent broker/dealers 13% [6] - National RIAs forecast that the weighted average for client allocations to alternatives will rise to 15% [6] Operational Challenges - RIAs face hurdles in adopting alternatives due to a lack of operational support, limiting them to registered funds that offer liquidity and ease of reporting [7]