A lack of knowledge about alternative investments is keeping IRA account holders from switching more of their assets to non-traded alternatives, according to a new survey by Pensco, a San Francisco-based custodian of $10 billion in retirement accounts.
Seventy-one percent of the 682 Pensco clients surveyed said they would increase their holdings if they had a better understanding of non-traded alternatives. Meanwhile, 70 percent would increase investments if they had more access to non-traded alternatives.
The most important reasons for investing in alternatives are diversification and being able to invest in markets that the account holder has knowledge of, Pensco says.
More Pensco clients want to use “less liquid retirement dollars to participate in longer term private placement opportunities, especially in light of the growth of the crowdfunding space,” which provides alternative investments in a wide range of markets, says Kelly Rodriques, Pensco CEO.
To assist clients with alternative investments in self-directed retirement accounts, Pensco earlier this year launched the Pensco Marketplace, a network of providers, products and services for alternative asset investors.
“With the rise of crowdfunding platforms, the range of opportunities is multiplying and investors and their advisors need additional support and resources to find investment opportunities that are appropriate for their long-term goals,” says Rodriques.