Alternative investments have moved from the margins to the mainstream, according to research released on Wednesday by New York City-based alternative investments specialist CAIS and consultancy Mercer.
The results of the fourth annual study conducted by the firms revealed there has been widespread adoption, with 90% of financial advisors allocating to alts in 2025 and 88% planning to increase alts allocations over the next two years, in line with findings from the prior three reports.
According to “The State of Alternative Investments in Wealth Management,” 49% of the 789 financial advisors surveyed allocate over 10% of client portfolios to alts, and 74% allocate at least 5%.
The findings also indicated alts are spreading to a broader client base, with 80% of advisors serving non-accredited investors allocating to alts, “underscoring the growing democratization of private market access,” the firms said in a press release.
Advisors said client education and suitability are their biggest priorities in the next phase of alts adoption, according to the report.
“Advisors’ commitment to alternatives shows no sign of slowing,” the report stated.
“Advisors’ commitment to alternatives shows no sign of slowing.” – CAIS Mercer survey
As demand for alts grows, advisors are increasingly focusing on optimizing workflows, the report said.
Among surveyed advisors, 77% said they preferred model portfolios to simplify alternative investing, and 55% saw analysis tools as their most valuable technology feature, according to the report.
Similar responses for integrations (49%) and digitization (47%) highlighted the increasing role of technology and data-driven insights in advisor practices, the report said.
“Four years of consistent results indicate that advisors have a level of conviction around alternatives that parallels other institutional investors,” said Gregg Sommer, Partner and US Financial Intermediaries Leader at Mercer. “As advisor adoption continues, enhanced due diligence and research tools intended for the advisor community will be crucial in helping meet this demand.”
Allocations And Themes
Advisors reported at least some allocation to private equity at 89%, private credit at 88% and real estate at 86%, the report showed.
Interest in thematic areas also grew, with 70% of respondents planning to raise the AI theme to clients, 58% tax-advantaged strategies and 36% energy transition-related investments.
Additionally, about 50% of advisors surveyed said they planned to increase or maintain allocations to structured notes next year, the report said.
“Heading into 2026, more advisors now look to alternatives to help their clients meet their goals and objectives, which overtook practice differentiation as the top perceived business benefit,” the report stated.
The report went on to say, “As alternative investments transition from niche differentiators to portfolio staples, advisors may have to shift their focus from simply offering access to alternatives toward demonstrating how these investments might solve specific client challenges.”
“This year’s results send a clear message: advisor demand for alternatives isn’t a passing trend, instead it’s a structural shift,” Brad Walker, President of CAIS, said in the release. “We’re seeing advisors integrate alternatives as a core part of portfolio construction. As technology and AI continue to streamline access, we expect these allocations to deepen even further.”
The 2025 CAIS Mercer Survey was conducted from Sept. 17 to Oct. 17 and included responses gathered at the CAIS Alternative Investment Summit in Beverly Hills, California. Respondents included independent RIAs, broker-dealer affiliates, family offices and other advisor professionals, according to the firms.
The report cautioned that, “due to the survey’s limited pool of respondents, which predominantly included those already active in the CAIS network, the sample is not necessarily representative of the broader wealth management industry.”
CAIS said it serves more than 2,000 wealth management firms supporting over 62,000 financial advisors with about $7.5 trillion in client assets.
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
