Alternatives in retail investor portfolios a $1 trillion-plus market opportunity
NEW YORK–(BUSINESS WIRE)–The rise of digital platforms that enable investors to own stakes in art, wine, farmland, metals and other alternative assets (“alts”) has democratized an asset class once only available to institutional and ultra-high net worth investors. The companies poised to take advantage of burgeoning interest from individuals with newfound access to this category are those that best educate potential investors and address their misperceptions. That’s according to a recent survey of active retail investors conducted by Opinium on behalf of Lansons.
The majority of Americans are unfamiliar with digital platforms that offer access to alts. Four out of five (80%) have either never heard of these platforms or don’t know much about them. The awareness gap is largest amongst older Americans, who are generally more affluent. Three in ten Gen Z and one in four Millennials (30% and 26%, respectively) know of digital alts investing platforms or already invest through one. Comparatively, only 17% of Gen Xers and 13% of Boomers have knowledge of alts investing platforms or already invest in alts.
What’s at Stake
Educating investors about the investment case for alts, and building compelling and differentiated brands, is key to gaining market share in this nascent industry. Consider that one fifth (20%) Americans would strongly consider investing in alts, and 7 percent are already planning to do so. Further, active investors – those who currently have investment accounts for stocks, bonds or cryptocurrencies – would be willing to allocate 25% of their portfolios, on average, to alts. This represents more than $1.3 trillion dollars in potential retail investment.*
Barriers and Opportunities
The biggest barrier to investing in alts is concern about fraud and scams (42%). “When any new type of investment product is introduced, it is natural that investors may be skeptical,” said Josh Passman, CEO of Lansons New York. “Proactively showcasing a commitment to compliance, humanizing the people behind the platforms, and amplifying third-party endorsements including positive media coverage, are among the tools available to build trust with current and potential investors.”
Current market conditions also provide a timely opportunity for the industry to educate Americans about the investment case for alts. Nearly half (47%) of those surveyed expressed extreme concern about the impact of inflation on their investments. “Given that alts including wine, gold and real estate are generally regarded as strong hedges against inflation, the current market climate presents a meaningful moment in time for marketers to highlight the benefits of alts as part of a diversified investment portfolio,” added Mr. Passman.
Other Key Findings
- Nearly four in ten (37%) Americans believe that they do not have enough money to invest in alts, another major barrier, despite a broad range of existing platforms offering minimum investments below $100.
- Only 17% of active investors say they are unwilling to allocate any of their portfolios to alts. More females (21%) than males (15%) would not consider making an allocation.
- The top reasons individuals hold alts or would consider investing in them are the opportunity for better returns than stocks or bonds (35%), the opportunity to invest in something they care about or find interesting (34%), and to feel like they own something tangible (29%).
For more information about Lansons Alternative Asset Platform Survey, including what providers can do to address investor misperceptions and establisher strong customer relationships, please contact firstname.lastname@example.org
Lansons partnered with strategic insights agency Opinium to conduct a nationally representative survey of 1,832 Americans. The survey was weighted using the latest figures from the U.S. Census Bureau. “Active Investors” is defined as anyone who has an individual investment account, including in stocks, bonds, crypto, etc. The study was conducted between September 6 –September 12, 2022.
*Of the 1,832 adults surveyed, 25% were active investors, which is equivalent to 64,585,820 Americans (258,343,281 (U.S. Adult population) x 25% (active investors)). The median amount held in investments among active investors was $82,013.27. On average, active investors we’re willing to allocate 25% of their portfolio toward alternative investments. This equates to a median of $20,175.27 to be potentially invested in alternative assets per the average active investor ($82,013.27 * 25%). The median potential investment in alternative assets ($20,175.27) x the number of active investors in the U.S. (64,585,820) is equal to 1.303 trillion.
With offices in London and New York, Lansons is a leading independent reputation management consultancy,100% owned by people working in the business. It has been voted agency of the year 30 times since it was established in 1989. Lansons has over 90 people, has won over 100 major awards, and works for more than 150 national and international clients. Through its membership of the international networks PROI Worldwide and Global Communication Partners (GCP), Lansons delivers global expertise and strategic advice.
About Opinium Inc.
New York and London based OPINIUM is an award-winning strategic insight agency built on the belief that in a world of uncertainty and complexity, success depends on the ability to stay on pulse of what people think, feel and do. Creative and inquisitive, the Opinium team is passionate about empowering clients to make the decisions that matter. Opinium works with organizations to define and overcome strategic challenges – helping them to get to grips with the world in which their brands operate. It uses the right approach and methodology to deliver robust insights, strategic counsel and targeted recommendations that generate change and positive outcomes. Opinium’s consultants are experts in political, financial services, tech, industrial, healthcare and consumer packaged goods research.
Opinium – What People Think, Feel and Do. www.opinium.com