Episode summary
Episode 28: Navigating the Growth of Alternatives in Wealth Management with Guest Loren Fox, FUSE...
Alternative Allocations
· · Hosts: Tony Davidow · Guests: Loren Fox
Summary
Loren Fox argues that alternatives are moving from a niche institutional product into a core wealth-management allocation, but adoption is still early. He says most advisors using alternatives are only allocating about 2% to 5%, with the heavier users concentrated among larger practices, private banks, and wirehouses. The main appeal is diversification, downside protection, and a potential growth boost, but the biggest barrier is time: advisors are busy, and alternatives still require education and a willingness to work through complex structures.
Fox says firms are responding with more access, more digital education, and more specialist support. He highlights model portfolios, evergreen structures, and public-private blended products as important growth areas, while warning that forcing illiquid assets into daily-liquidity wrappers like ETFs may be the wrong solution. He expects wealth management alternatives assets to rise from about $1.4 trillion today to $3 trillion by 2029, driven by private credit, selective private equity and real estate, and potentially new exposure in infrastructure and secondaries.
Key takeaways
- Loren Fox says alternative adoption in wealth management is still low, with most advisors using 2% to 5% allocations and only a few reaching 5% to 10%.
- Fox says advisors are mainly attracted to alternatives for diversification, downside protection, and upside potential, in that order.
- Fox says the biggest obstacle is advisor time and education, especially because clients expect more from advisors while alternatives remain complex.
- Fox says firms are meeting demand with digital content, online training, and alternative specialists who can help advisors one-on-one.
- Fox expects wealth management alternatives assets to grow from about $1.4 trillion to $3 trillion by 2029, a 17% annual growth rate.
Notable quotes
“They're seeking diversification or some sort of less correlated sets of returns and risks”
“advisors have sort of the alternatives 101 content down path. Now they're looking for the next class, if you will”
“we estimate that the wealth management channel now accounts for something like $1.4 trillion dollars in alternatives assets”
“We expect that to grow to three trillion by 2029”
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 Alternative Allocations podcasters. I'm thrilled to be joined today by Lauren Fox. Welcome, Lauren.
Thank you, Johnny. Great to be here.
So, Lauren, you and I have known each other for a long time. Maybe if you can just paint a little bit of a picture of how you've seen the industry over the years and your various sort of roles as you've been researching how this industry has evolved. What's really exciting is to see this new phase of growth in the alternative part of the industry.
You know, as you've covered in previous episodes and in your book, Alternative started really as the province of institutions and very high netw worth investors. And over the last few years, that has been changing. And a big part of the growth now is expected and certainly we expect it to come from the wealth management channels particularly because there are so many products that have been launched and that are continuing to be launched that take the private markets and make them much more accessible in product wrappers that are much easier to use by financial advisors.
And thank you. We'll certainly delve into all of that. I wanted to maybe take a little bit of a step back. I have known you for a long time. For my audience who may not, — If you could just share a little bit of your background and then your role specifically at Fuse today.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- wealth management alternatives
- advisor adoption
- diversification and risk mitigation
- alternatives education and digital content
- model portfolios and blended public-private products
Companies and tickers mentioned
- BEN
- FUSE Research Network
- 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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Alternative Allocations, this episode and its artwork belong to Franklin Templeton. Octagon is not affiliated with the show; this page is an independent summary.
