Financial advisers are underweight in alternative investments, weighing at 5 percent in client portfolios, according to Morgan Stanley’s CEO Ted Pick. With the availability of alternative investments gradually increasing, increased access is a major factor in the improving representation of alternatives in portfolios.
“We can debate in this moment when liquidity’s getting repriced whether the right level is 10 percent or the traditionally modeled 15 percent number — maybe it’s 10, maybe it’s 15, maybe it’s more, but it’s somewhere in that range for alternatives weighting for ultra-high-net-worth,” Pick said. “That means that today we are structurally underweight in the system of $250 billion to $500 billion in alternatives.”
Morgan Stanley is an example of a firm racing to offer more options for alternative investments and broaden the range of fund options. With liquidity concerns and complexity historically surrounding alternatives, Morgan Stanle
