Investments advisors appear poised to accelerate their use of alternative investments such as hedge funds, real estate and commodities, according to a new poll.
   The national poll by Rydex AdvisorBenchmarking Inc. found that 55% of advisors expect to increase their allocations in alternative investments by 25% over the next five years, and 13% plan to increase their use of the investments by more than 75%.
   In terms of the specific investments they are targeting, 24% of those surveyed said they believe capital protected and structured products, including commodities, have the greatest growth potential. Also cited as growth areas were real estate, 16%; private equity and venture capital, 15%, and hedge funds, 13%.
   "Alternative investments are becoming increasingly important to advisors," said Maya Ivanova, research analyst for Rydex AdvisorBenchmarking Inc. "In fact, our survey indicates that nearly one fourth of advisors believe that they will be more important than traditional investments-such as stocks, bonds and cash-in the coming years."
   These were among the other findings of the survey:
    Among the reasons cited for turning to alternative investments are a desire to use different investment techniques, 40%; seeking absolute returns, 38%; filling portfolio allocations, 29%; addressing portfolio correlations, 28%, and seeking unique vehicle structures, 25%.
    A majority of advisors, 51%, believe retiree clients are hesitant to invest in alternative investments mostly due to a lack of understanding. Other reasons cited were a lack of liquidity, 27%, and a lack of clarity in how alternative investments work in an overall portfolio strategy, 27%.
    A large majority of advisors, 90%, believe hedge fund registration is a positive development.
   The survey was conducted online with 333 RIAs in November 2006, according to Rydex.