Cetera today introduced the first set of its Alternative Investments allocation models designed for firms wanting to offer other forms of capital to clients.
The first model, the Cetera Blended Alternatives model – Moderate, includes six alternative funds with exposure to private equity, private credit, and private real estate investments. Cetera says its new model offers diversification and the possibility for enhanced returns without adding complexity or time demands for advisors.
Cetera’s Due Diligence and Cetera Investment Management’s research teams researched and vetted the portfolio in partnership with iCapital, an alternative investment marketplace and business partner of the company’s. According to Cetera, iCapital will continue to monitor the Cetera Blended Alternatives Model and provide monthly and quarterly model-level reporting.
“We see Cetera as the first independent broker-dealer to introduce this kind of alternatives model and we believe it will create significant value for our advisors. We have a high degree of confidence in our alternative investments concepts and approach, thanks to the deep research and due diligence conducted by our Cetera Investment Management team,” said Christian Mitchell, president of Cetera Solutions. “Their deep knowledge of alternative investments landscape led to a data-driven decisions about the fund managers we selected.”
In providing traditional and alternative investments, Cetera advisors are offered a “holistic and streamlined approach” to adding non-correlated assets, which can help them create better-diversified portfolios for accredited-investor clients, the company said in their release.
The models come as more participants show interest in incorporating alternative investments in their portfolios. A May report by consulting firm Lansons Team Farner found that 26% of Americans are planning to invest in alternative assets within the next few years or will strongly consider it. Almost half (48%) of respondents to the survey expressed some level of interest in alternative investments.
“Especially for high-net-worth clients, financial advisors should have access to alternative investments as another tool within their overall financial planning strategy because alternatives can help dampen the effects market volatility has on a client’s investment portfolio,” said Matt Fries, head of Investment Products & Partner Solutions for Cetera. “There’s been tremendous change in the alternative investments marketplace in the past 10 years, spurring greater client awareness of and demand for alternative investments, which have become a more mainstream tool for advisors constructing modern client portfolios.”
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.