Core Insights - The review of ERISA fiduciary guidelines by President Trump has led to increased interest in alternative investments among 401(k) plan advisors [1] - A significant portion of defined contribution plan advisors are likely to recommend alternative investments, with 10% already doing so [1][2] Group 1: Advisor Interest in Alternative Investments - Approximately 25% of defined contribution plan advisors are likely to recommend alternative investments in workplace plans [1] - Private equity, private real estate, and private credit are the most favored asset classes, with over one-third of advisors either recommending them or showing strong interest [2] - Hedge funds and venture capital have moderate support, while private infrastructure and secondaries have lower enthusiasm, with only about 25% of advisors expressing interest [2] Group 2: Retail vs. Institutional Interest - Interest in alternative investments is rising among retail investors, similar to trends observed in the defined contribution plan space [3] - Advisors have historically used alternatives for high-net-worth and institutional clients, but these options are becoming relevant for employees across various income levels [3] Group 3: Cryptocurrency Interest Discrepancy - Only 2% of surveyed advisors are actively recommending cryptocurrency, with an additional 17% interested in future recommendations [4] - In contrast, 9% of plan participants are already investing in cryptocurrency, and 25% express strong interest, indicating a 74% higher interest in crypto among participants compared to advisors [5] - An investment management consultant suggests that both private equity and cryptocurrency should have limited allocations in portfolios, recommending 5% for older participants and 15% for younger ones [6]

Core Insights - Trust in and engagement with financial advisors has reached a new high among affluent investors, defined as those with at least $100,000 in investable assets [1] - Wealth management firms have a critical opportunity to differentiate and drive growth by fostering trust and leveraging digital tools alongside human-centric advice [2] Affluent Investor Landscape - 42% of affluent investors reported having a traditional financial advisor, a 300-basis-point increase from the previous year [2] - Reliance on financial advisors is highest among first-wave baby boomers at 48% and Gen Z at 46%, while Gen X reported the lowest at 38% [2] Robo Advisor Usage - 20% of all investors reported using robo advisors, a 500-basis-point increase compared to the previous year [3] - Over half of Gen Z affluent investors (55%) are using robo advisors, up from 33% a year ago; 42% of millennials and 24% of Gen X investors also utilize robo advisors [3] Asset-Based Robo Advisor Reliance - Reliance on robo advisors is highest among investors with $100,000 to $500,000 in assets at 22%, compared to 18% for those with over $500,000 [4] - New robo advisor platforms, such as Robinhood's for investors with over $100,000 and Wealthsimple's entry into the U.S. market, indicate growing competition in this space [4] Self-Directed Investors - 34% of affluent investors reported being "self-directed," with the highest share among Gen Z and the silent generation at 36% [5] Trust Levels - Trust in the financial investment community is highest among those working with traditional financial advisors at 73%, an increase from 64% in 2023 [6] - Among self-directed investors, only 50% reported having trust in the financial investment community [6]

Core Insights - SMAs have seen significant growth, increasing by over 54% to $3.86 trillion in assets as of Q1 2025, according to Cerulli Associates [1] - Despite the growth, average redemption rates for SMAs are in the double digits, which is higher than asset managers anticipated [1] Group 1: Growth of SMAs - Asset managers have rapidly launched managed accounts, with Edward Jones doubling its SMA offerings this summer and Percent launching its first SMA focused on private credit [2] - Research indicates that advisors prefer SMAs over model portfolios due to lower fees and greater customization, with assets in SMAs growing by nearly 70% to $500 billion from early 2023 to mid-2024 [2] Group 2: Redemption Rates - A Cerulli survey found that the average redemption rate for equity SMAs is 21.1% and 15.9% for fixed-income SMAs, which are higher than expected despite being comparable to mutual funds [3] - Asset managers had anticipated investors would remain in SMAs for 10 to 20 years, but the actual holding period is closer to five years [4] Group 3: Market Volatility Impact - Persistent market volatility over the past six years may contribute to higher redemption rates, as clients can react quickly to market downturns [5] - Asset managers viewed SMAs as long-term investments due to the complexity of liquidating multiple individual stocks, but short-term market disruptions and client needs have led to shorter holding periods than expected [6]