Investors Who Work With Advisors Say They Are More Knowledgeable About Alternatives; Morgan Stanley Wealth Management Investor Pulse Poll Finds That Physical Assets Dominate List of Alternative Asset Classes Investors Own or Intend to Purchase
Regarding ownership of alternative asset classes, real estate has no rival. Fully 77% of millionaire investors say they own it, and 35% say they own a related investment, Real Estate Investment Trusts (REITs). This is a key finding of the Morgan Stanley Wealth Management Investor Pulse Poll, a periodic survey of U.S. high net worth investors, including a subset of households with a million dollars or more in financial assets. 1 Questions about investments in alternative asset classes were posed only to the millionaire sample.
The survey found that investors who received advice from a financial advisor are much more likely to say they were knowledgeable about alternative asset classes (57%), compared with those who have not received professional advice (30%).
“This finding underscores the important role financial advisors play in providing information and education about the potential use of alternative asset classes by suitable investors in an appropriately diversified investment plan,” said Andy Saperstein, Head of Investment Products and Services for Morgan Stanley Wealth Management.
After real estate and REITs, millionaire investors cite ownership of collectibles (34%), followed by precious metals (28%), private equity (27%), real assets (oil, gas, mining, 17%), private real estate funds (16%), hedge funds (16%), and venture capital (13%).
Asked to recall an alternative investment unaided, 77% of millionaires can recall at least one (led by hedge funds, at 19%), while the remainder (23%) said they could not recall an alternative without prompting.
As with actual ownership, real estate (33%) and REITs (23%) lead the list of alternatives the surveyed investors expect to buy in 2014, followed by collectibles (20%), private equity (19%) and precious metals (16%).