The survey, conducted in April and May 2011 had included a sample of 1,642 retail investment advisors who were asked about their usage of alternative investments.
The survey found out that 84% of advisors at one of the four national wirehouses employed alternatives in client portfolios.
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Among other channels surveyed, 78% of independent broker-dealers and 77% of regional broker-dealers used alternatives, followed by 75% of advisors employed by banks and 69% among RIAs.
Antonio Ferreira, Cogent’s managing director commented, "A lot of wirehouse advisors had single-manager hedge funds for many years because they had more affluent, qualified clients relative to their peers."
Cogent Research survey found that on an average, 11% of the advisors allocate their AUM to alternative investment classes.
15% of the respondents said they were heavy users of alternative vehicles, with at least 15% of AUM being invested in those products, 30% said they were moderate users allocating 6% to 14% of AUM to alternative investments and the remaining 45% described themselves as light users allocating 1% to 5% of AUM in those products.
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By GlobalDataThe usage of alternatives varied among clients, with 29% of affluent investors using alternatives and owning an average of 2.1 products, whereas HNWIs owning an average of 3.5 products.
The survey also showed advisors gravitating toward alternative strategies provided by mutual funds and ETFs.
"It’s the up-and-coming boutique firms who are standing out in the alternatives category and doing a better job promoting their value propositions," Ferreira opined.
