Cetera Investment Management has joined a growing list of financial advisory firms incorporating alternative investment model portfolios into their product line-ups. On Wednesday, the independent broker/dealer announced the launch of the first of what will be several allocation models featuring alternative investments.
Cetera Blended Alternatives Model-Moderate includes six funds focusing on private equity, private credit and private real estate assets. Aimed at accredited investor clients, the custom model was researched and vetted in partnership with alternative investment platform iCapital. Going forward, iCapital will continue to monitor the performance of the models, including providing monthly and quarterly reporting. The allocations available through Cetera Blended Alternatives Model-Moderate can be used to build the models in Cetera’s My Advice Architect platform.
Cetera follows peers, including LPL Financial, MAI Capital Management and Edward Jones, in expanding its alternative investments capabilities. In February, LPL launched a full-service alternative investment platform, LPL Alts Connectpowered by alts tech support provider SUBSCRIBE. In April, Edward Jones partnered with alternative investment platform CAIS to add alternative investment options for its high-net-worth clients through Edward Jones Generationsits private client service. In May, MAI Capital announced it was integrating iCapital technology into its in-house platform to help build custom portfolios featuring alternative investments.
The announcement comes amid a boom in adding private assets to model portfolios. As financial advisors increasingly look for model portfolios with private market exposure, asset managers and investment platforms are rushing to meet the demand. For example, last month, CAIS added the first investment models from BlackRock, Carlyle and KKR to its CAIS Models Marketplace. Wealth management platform Envestnet also revealed it was adding models with private market exposure options from Fidelity, BlackRock, Franklin Templeton and State Street Global Advisors. Last year, alternative investment platform iCapital launched its first model portfoliowith access to private equity, private credit and real assets.
“Especially for high-net-worth clients, financial advisors should have access to alternative investments as another tool within their overall financial planning strategy because alternatives can help dampen the effects market volatility has on a client’s investment portfolio,” Matt Fries, head of investment products and partner solutions for Cetera, said in a statement. “There’s been tremendous change in the alternative investments marketplace in the past 10 years, spurring greater client awareness of and demand for alternative investments, which have become a more mainstream tool for advisors constructing modern client portfolios.”
“Model portfolios are a critical in how we meet advisors where they are,” Kunal Shah, managing director and head of private markets research and model portfolios at iCapital, said in a statement. “Advisors are seeking a portfolio-level solution to incorporate alternative investments in their overall portfolio. By embedding alternatives into familiar portfolio construction frameworks, we empower advisors to deliver diversified, outcome-oriented solutions without compromising on efficiency or customization. This is about simplifying access to alternatives and enabling scale,” said
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