Cincinnati-based structured products and annuities platform Luma Financial Technologies has expanded its ongoing relationship with Yieldstreet, a leading private market investment platform, to offer alternative investment products to Luma’s advisors.

Through the expanded partnership, New York-based Yieldstreet will provide Luma advisors alternative options in three ways, according to Michael Weisz, CEO of Yieldstreet.

First, they can go on the platform and select from Yieldstreet’s lineup of 12 alternative products for client portfolios. Second, they can select a theme and the system will guide them to products that fit it.

Finally, they can access several model portfolios available on Yieldstreet’s platform, such as a risk-based model that they can use for their clients.

For Luma’s advisors it means greater access to alternatives, along with easier access to those products, education about them and ongoing management, said Tim Bonacci, CEO and president at Luma Financial Technologies.

“Many advisors, if not most advisors, see the need and the benefits for their clients to diversify and to diversify into alternatives,” he said.

The two firms’ partnership originated in 2022 focusing on structured products. The expansion to alternative investments was a natural evolution, according to Bonacci. 

Weisz added that the ever-growing interest in alternative investments from advisors prompted the firms to expand their relationship.

“The end customers and the advisors are seeing and hearing ... alternative investments are really core to having a really healthy, well-balanced portfolio,” Weisz said. “We got a good kick in the butt from the advisor market, who really needed this solution to help their clients.”

Advisors are becoming more interested in alternatives as the products become more accessible to a wider audience. Since the universe of public company investments has shrunk, many investors who want to invest in certain names must go through the private markets, Weisz said.

“You’re going to see every portfolio is going to have private market exposure over the next number of years.”

Luma is providing educational training, post-trade advisor management, and reporting tools to help advisors make alternative investments a more integral part of client portfolios, Bonacci said.

The two firms are already considering improvements to the platform. One is to provide greater options for advisors working with accredited investors and not just qualified purchasers. The other is offering shorter durations such as debt and debt-like products, Weisz said. 

He believes that the coming year will see big changes afoot in the tech space as advisors compete for clients.

“For a long time, advisors have been trying to figure out how to add value to their customers,” Weisz said. “They’re losing portions of their customer’s portfolio with all of the new technology and services available to them, and being able to provide alternatives in a seamless way really helps the advisor continue to add value.”