The current financial environment has financial advisors interested in alternative investments, with many offering them to accredited investors, while many in the industry believe that the definition of “accredited investor” should be expanded, according to a recent report.

About a third of financial professionals don't believe that the traditional 60/40 stock/bond mix is effective for investing any longer and 42% believe it’s not as effective as it used to be, CAIS, an alternative investment platform for financial advisors, says it found in a survey of 303 respondents, 107 of whom identified themselves as financial advisors.

The survey was fielded on May 16 and 17 at the 2022 Morningstar Investment Conference in Chicago.

CAIS also found that among respondents who identified as financial advisors, 84% claim they’re already recommending alternatives to clients who meet accredited investor requirements.

Among all survey respondents, meanwhile, a full 80.9% believe all retail investors should be able to invest in alternatives, according to CAIS.

The company says it also found that 74.9% of respondents think the Securities and Exchange Commission’s definition of accredited investor is ready for a revamp. Among those who think so, 43.6% believe the current definition is too rigid, while only 11.5% believe it’s too loose, and 41.4% think that the income threshold for individuals should be lower, according to the report.

Alternatives do present a set of challenges for advisors, however: 69% say lack of education about alternatives is an obstacle, while 37.6% point to high levels of administration and 34.3% say they’re concerned about difficulties in the due diligence and compliance processes, CAIS found.

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