Goldman Sachs’ Restieri noted that “in the retail space, not only are these new products for investors, they are also new products for advisors.” Still, he emphasized that his firm is working with Fidelity to educate advisors. They also emphasized that, with more alternative investments coming to market, fees are declining.

And the potential of these products, Restieri added, is achieving investment goals while reducing risk. “You can use them to get to your return objectives in a less volatile way.”

Any of these can be difficult for both advisors and their clients to understand. So Gallagher said that Fidelity has been running seminars to educate advisors about their alternative products and how they should be used.

Asked by Financial Advisor if there was a possibility of a repeat of the limited partnership disasters of the 1980s, when thousands of investors lost lots of money in illiquid, high-commission products that were often misunderstood, Fidelity’s Diamond said the company and its partners would employ “all the due diligence” needed to ensure these products were right for the investor.

Other challenges for alternative investments, Fidelity officials said, include keeping up with fiduciary rules, access, reporting and building scale in both liquid and illiquid alternative products. Another challenge for alternative products is the lack of “transparency and standardization,” said a technologist trying to take the product into the mainstream.

Matthew Brown, CEO and founder of CAIS, said advisors interested in using the asset class for the first time will need “accessibility and support” to incorporate it as part of their portfolios. Brown noted that many smaller advisors interested in alternatives lack the resources to oversee these products, many of which are relatively new.

He said the CAIS platform will provide all the operational and investing due diligence. “This isn’t really about replacing the advisor on due diligence. This is more about helping them narrow that manager universe and provide them the resources, and [it] will only help them.”

However, another product challenge, conceded Morningstar’s Charlson, is that many of these alternative investments are terra incognita. Often they have little or nothing in the way of track records. “Generally,” he added, “we like to see a fund with a three-year track record.”

Nevertheless, despite the hurdles to getting investors and their advisors out of the mind set of stocks and bonds and little else, Restieri predicted that alternative investments will become the meat and potatoes of most investment portfolios.

“This is going to happen fast. And five years from now,” Restieri said, “we will not even be having this conversation because alternative investments will be a natural part of most peoples’ portfolios.”