From Art to Wine to Farmland, Alternative Investments Poised for Huge Inflows Despite Limited Awareness and Misperceptions, Finds Lansons Survey
Alternatives in retail investor portfolios a $1 trillion-plus market opportunity
NEW YORK (December 1) – 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%).
With offices in 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.
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.