Seventy-seven percent of Americans familiar with retirement accounts are expressed interest in investing their IRAs in alternative assets, but 44% do not understand how to achieve that goal, according to new opinion research from PENSCO.
The research finds that Individuals can invest in alternative assets in a variety of tax-advantaged retirement accounts including a traditional IRA, Roth IRA, SEP-IRA, Solo(k), 401(k) for sole proprietors and other types of qualified plan accounts.
PENSCO CEO Kelly Rodriques said that the PENSCO Market Barometer uncovered several important trends about how investors and advisors view alternative assets.
"First, there is a significant knowledge gap among Americans about investing in alternative assets in IRAs. Many investors know that alternative assets can build wealth in their tax-advantaged retirement accounts, but they lack the know-how or an advisor who can help them achieve that goal," Rodriques said.
"Second, many advisors appear reluctant to put clients in direct alternative investments or pooled alternative investments in retirement accounts because of rules imposed by banks and brokerages holding IRA funds," Rodriques said.
"Financial advisors, particularly independent advisors, have an immediate opportunity to grow their business and meet client needs by offering high growth or high yield alternative assets as one part of a broader asset allocation strategy."
The PENSCO Market Barometer which conducted a poll among investors and high net worth advisors also highlights that eight in 10 advisors say their clients have expressed interest in investing in alternative assets, but only 10% of the advisors currently offer that capability.
PENSCO in collaboration with Koski Research conducted the opinion research in which 1,000 people and and 365 financial advisors with more than $10m in assets under management across the US were polled.