The democratization of alternative investments is reshaping wealth management, presenting both opportunities and operational challenges. Once the domain of institutional investors and ultra-high-net-worth individuals, alternative investments are now accessible to a broader audience, including the mass affluent segment with investable assets ranging from $100,000 to $1 million. Retail investors are increasingly drawn to these asset classes for higher yields and diversification, supported by greater access to investment information.
For wealth managers, this shift offers a unique opportunity to differentiate their services, retain clients and attract new investors. A growing number of advisors are integrating alternatives into portfolios, with 85% planning to increase allocations in the coming year. However, managing and reporting on these complex assets requires sophisticated solutions.
Private fund data is non-standardized, unstructured and delivered at irregular intervals. After the data is collected, advisors must extract and normalize it to interpret the data and provide clients with a comprehensive view of their portfolio holdings. Wealth managers need systems capable of handling the added complexity and producing holistic reporting for clients. From an inundation of documents to time-consuming document retrieval, operational challenges multiply with each alternative investment fund in a portfolio.
Choose a solution that combines technologies with deep alternative asset expertise. The right solution should use intelligent automation to retrieve fund manager portal documents; paired with natural language processing to read and extract relevant document data for processing into downstream systems. The data derived from the technology should be verified by experienced users as part of a quality control review to ensure accuracy and completeness. Outsourcing is the most efficient and cost-effective way to access both the technology and expertise wealth managers need, as maintaining those resources in-house can pose a significant burden.
To learn more about how outsourcing can help wealth managers make the most of the growing opportunities in alternatives, download our "Wealth Managers: How to Make the Most of Opportunities in Alternative Investments" whitepaper.
