Key Takeaways
- • Nine in 10 U.S. advisers (90 percent) are actively allocating to alternative investments, with 88 percent expecting to increase allocations over the next two years, according to a CAIS and Mercer survey of 800 financial advisers conducted September-October 2025.
- • Private credit ranks as the second-largest allocation priority at 88 percent adoption, trailing only private equity (89 percent) and matching real estate (86 percent), signaling private credit has transitioned from niche to core portfolio holding.
- • Alternative investments are scaling beyond high-net-worth clients, with four in five advisers serving non-accredited investors now including alternatives in portfolios, fundamentally expanding the market beyond traditional wealthy investor segments.
- • Nearly half of advisers allocate more than 10 percent of client portfolios to alternatives, while three-quarters allocate at least 5 percent, reflecting material position sizing rather than satellite exposure.
- • Model portfolios and analytical technology are driving adoption, with most advisers preferring standardized models to simplify alternative investing, while more than half cite analytical tools as the most valuable technology component in their workflow.
Summary
The integration of alternative investments into mainstream portfolio construction has reached a structural inflection point, with 90 percent of U.S. financial advisers now allocating to alternatives and 88 percent committing to increased exposure over the next two years. This represents far more than cyclical demand, according to research from investment platform CAIS and Mercer. Brad Walker, president of CAIS, characterized the shift as a "structural shift" rather than a "passing trend," emphasizing that advisers are integrating alternatives as core portfolio components rather than peripheral holdings.
Private credit has emerged as the dominant allocation target, adopted by 88 percent of surveyed advisers—effectively matching private equity (89 percent) and exceeding real estate (86 percent) in prevalence. The survey of 800 financial advisers, conducted from September 17 to October 17, 2025, including responses from the CAIS Alternative Investment Summit, reveals that position sizing has become substantial. Nearly half of respondents allocate more than 10 percent of client portfolios to alternatives, while three-quarters allocate at least 5 percent, indicating that alternatives have graduated from satellite exposure to meaningful portfolio weight.
A particularly significant finding is the democratization of alternative investment access. Four in five advisers serving non-accredited clients—traditionally excluded from private market opportunities—now include alternative investments in portfolios. This expansion reflects both adviser confidence in alternatives' risk-adjusted returns and improved accessibility through structured vehicles and advisory platforms. The shift carries meaningful implications for capital flows into private credit and related strategies, as wealth below ultra-high-net-worth thresholds gains meaningful exposure.
Advisers are prioritizing technology and education to manage this scaling responsibly. Most advisers prefer using model portfolios to simplify alternative investment integration, while more than half identified analytical tools as the most valuable technology workflow component. Client education and suitability assessment emerged as top priorities, indicating that advisers recognize the complexity and illiquidity characteristics of private credit require disciplined deployment and transparent communication.
Private credit has emerged as the dominant allocation target, adopted by 88 percent of surveyed advisers—effectively matching private equity (89 percent) and exceeding real estate (86 percent) in prevalence. The survey of 800 financial advisers, conducted from September 17 to October 17, 2025, including responses from the CAIS Alternative Investment Summit, reveals that position sizing has become substantial. Nearly half of respondents allocate more than 10 percent of client portfolios to alternatives, while three-quarters allocate at least 5 percent, indicating that alternatives have graduated from satellite exposure to meaningful portfolio weight.
A particularly significant finding is the democratization of alternative investment access. Four in five advisers serving non-accredited clients—traditionally excluded from private market opportunities—now include alternative investments in portfolios. This expansion reflects both adviser confidence in alternatives' risk-adjusted returns and improved accessibility through structured vehicles and advisory platforms. The shift carries meaningful implications for capital flows into private credit and related strategies, as wealth below ultra-high-net-worth thresholds gains meaningful exposure.
Advisers are prioritizing technology and education to manage this scaling responsibly. Most advisers prefer using model portfolios to simplify alternative investment integration, while more than half identified analytical tools as the most valuable technology workflow component. Client education and suitability assessment emerged as top priorities, indicating that advisers recognize the complexity and illiquidity characteristics of private credit require disciplined deployment and transparent communication.
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