In a FUSE 4Q24 survey of advisors, advisors predict meaningful shifts in their use of alternative product vehicles over the next two years, away from more liquid structures. These shifts in advisor alternative vehicle use have implications for both product development and educational programming.

• The biggest anticipated decline in advisor use (today versus in 2 years) is in publicly traded REITs (59% to 35%), liquid alternative mutual funds (53% to 40%), and liquid alternative ETFs (50% to 44%).
• Advisors’ anticipated shifts to less liquid alternative vehicles are evidenced by their projected adoption of interval and tender-offer funds, with 42% of advisors intending to use them in 2 years. The survey revealed a similar pattern for hedge funds with 45% of advisors planning to use them in 2 years. BDCs also saw a boost in anticipated adoption to 39% in 2years.
• The largest jump in adoption among advisors is for cryptocurrency/digital assets, which just 21% of advisors use today and 48% plan to use over the next two years.
• Notably, advisor use of alternative products is tied to their practice size. A greater percentage of advisors with $500M+ use all 10 alternative product structures compared to their smaller peers.