Episode summary
Episode 24: Alternatives as a Differentiator: How Advisors Are Meeting the Demands of High-Net-Wo...
Alternative Allocations
· · Hosts: Christine Gaze, Tony Davidow
Summary
The conversation centers on how high-net-worth and ultra-high-net-worth clients are pushing advisors toward more sophisticated wealth planning and more explicit use of alternatives. The guest argues that the industry has moved beyond a simple portfolio-construction mindset: advisors now need specialty knowledge in tax, estate, charitable planning, retirement distribution, and private markets, and they need a clear point of view on where alternatives fit in client portfolios.
The host and the guest both emphasize that alternatives are no longer a “nice to have.” The guest says advisors must be conversationally proficient, comfortable explaining illiquidity and structural trade-offs, and able to educate clients before money is committed. She points to tools like a 14-week practice-management program, white papers, and a 10-hour private markets course as ways to help advisors build that capability.
They also frame alternatives as a differentiator for mega teams and specialized advisory practices. The guest cites industry data suggesting mega teams manage a disproportionate share of assets, and argues that institutions and family offices have long used alternatives, while the wealth channel’s average allocation remains only 5% to 6% and could be higher over time.
Key takeaways
- The guest says high-net-worth clients increasingly demand alternatives and broader wealth planning, forcing advisors to build deeper specialty knowledge.
- The guest argues advisors need a deliberate alternatives strategy before clients ask for it, not a reaction at the point of sale.
- The guest says the biggest obstacle is behavioral: advisors must explain illiquidity and long lockups in a way clients can accept.
- The guest cites a wealth-channel average alternatives allocation of 5% to 6%, while arguing directionally it could move toward 10%, 15%, or 20%.
- The host and guest position education, including IWI training and a private markets course, as key to making alternatives a core discussion.
- The guest says mega teams are better positioned to attract affluent clients because they combine planning depth with dedicated asset-management specialists.
Notable quotes
“high- netw worth clients are demanding access to alternatives and I think that puts advisors in a difficult position”
“I think that it's important that advisors have a perspective on alternatives, a point of view and a strategy”
“They need to be conversationally proficient. They need to understand the role that the various types of alternatives play in client portfolios”
“Private markets by their very nature are illquid. And I always say we need to have those discussions in advance”
“the industry average is somewhere between 5 to 6%. Which is a very low allocation. Directionally, it should probably be closer to 10, 15, 20 depending on each client and their thresholds”
How the episode opens
This is Alternative Allocations by Franklin Templeton, a monthly podcast where we share practical, relatable advice and discuss new investment ideas with leaders in the field. Please subscribe on Apple, Spotify, or wherever you get your podcast to make sure you don't miss an episode. Here is your host, Tony Davidau. Welcome to the latest episode of the alternative allocation podcast series. I'm thrilled to be joined today by my good friend Christine Gays. Welcome Christine.
Thanks for having me, Tony. I'm excited to see you in person.
And this is a really exciting time. We're at the Investment and Wealth Institute National Conference celebrating 40 years of IWI. I actually joined what was then the IMA organization in 1995 and got my SEMA in 1996.
As an industry, we've evolved a lot, but I think IWI has been at the forefront kind of leading a lot of that evolution. You're now the chair of the Investment of Wealth Institute. Maybe it'd be worth talking a little bit about how you see the world evolving and then we'll talk a little bit about your specific background.
As you mentioned, IWI is marking its 40th year anniversary and it really started with professional investment management and the SEMA certification was really the certification that those that were offering institutional consulting got to really signify their education in this arena. And as you know over the years more and more retail financial adviserss those serving high net worth clients were interested in getting the SEMA because they wanted to have a more disciplined approach to investment management and portfolio construction. So the SEMA grew pretty significantly in the first 20 years of IWI's history.
But IWI did something interesting. I think it was the ' 0708 time frame. It was fortuitous in that it developed the certified private wealth advisor designation in recognition that more advisors were offering wealth planning and that required some discipline as well and the financial planning or the CFP which I hold as well is a really good starter designation but it's foundational knowledge and for those serving high net worth and ultra high net worth clients the CPWA was like CFP P301, if you will.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- high-net-worth client demands
- alternative investments
- advisor education
- iwi training
- wealth management teams
Companies and tickers mentioned
- AMTD
- AB
- WFC
- MS
- BEN
- Purpose Consulting Group
- TD Ameritrade
- AllianceBernstein
- Wells Fargo
- Morgan Stanley
- Investments & Wealth Institute
- Franklin Templeton
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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