WEALTH ADVISOR SURVEY RESULTS...10.1% 5.1% 0% 50% 100% It will increase between 5% and 10% It will...

WEALTH ADVISOR SURVEY RESULTS

Trends Facing Wealth Advisors and Alternative Investments

For Investment Professionals Only For Due Diligence Use Only | 1

Thank you for your participation in PPB Capital Partners’ Wealth Advisor Survey.

The goal of our survey was to gather industry knowledge, data, and trends facing the alternative investment industry in hopes of gaining insights that will help us better serve you and your clients. With 130 responses from leading professionals like yourself, PPB gathered valuable information that is detailed on the pages that follow. A few of the questions were similar to those we asked during our last advisor survey. When applicable, the historical answers are provided for comparison.

Frank Burke, PPB’s CIO, has summarized the key finding of the survey on page 2.

With an ever-changing investment landscape and a world filled with uncertainty, PPB is excited to share the results with you. If you have any questions or if you would like to discuss the results of the survey, we welcome a conversation.

Brendan LakeFounder, CEO & President

Overview


• 66% of respondents had more than $1B in AUM

• 45% of respondents said that >50% of their client base own Alternative Investments

• And of those respondents, their clients have at least 15% in alternatives

• Less than 2% said they have clients with zero exposure

• Surprisingly, only 36% said they used alternatives primarily for income

• Over 60% use alternative strategies for diversification or to enhance returns

• 98% of wealth advisors said they plan to increase or maintain their clients’ exposure, with 85% planning to increase the allocation between 5% and 10%

• This is a big change from 2017 when 7% said they were planning to decrease their exposure

• The strategies most likely to see an increase in allocation are:

• Real estate

• Private equity

• Private credit, including lending strategies

• The leading obstacle facing wealth advisors when allocating to alternatives was the team resources required for due diligence followed by the subscription process

• From their clients’ perspectives the lack of liquidity/lock-up periods, strategy complexities and K-1s were the main impediments to allocating to alternatives

• Nearly 70% would increase alts allocations if funds were able to be held in retirement accounts

Executive Summary


What type of firm do you work for?

82.9%

8.6%

2.9%

1.0%

4.8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

RIA

Family Office

Institution

Consultant

Other (High Net Worth Investor, Private Bank)


What is your firm’s total AUM?

15.1%

18.9%

50.0%

16.0%

0% 10% 20% 30% 40% 50% 60%

< $250M

$250M - $1B

$1B - $5B

> $5B


What percentage of your clients owns alternative investments?

1.6%

31.0%

22.5%

45.0%

2.1%

27.8%

19.1%

51.0%

0% 10% 20% 30% 40% 50% 60%

None

< 20%

20% - 50%

> 50%

2020 2017


What is the average allocation of your clients’ total portfolio to alternative investments?

34.7%

21.8%

21.0%

22.6%

0% 5% 10% 15% 20% 25% 30% 35% 40%

5% - 10%

10% - 15%

15% - 20%

> 20%


What is your primary objective when allocating to alternative investments?

61.3%

63.7%

62.9%

13.7%

6.5%

63.7%

36.3%

3.2%

0% 10% 20% 30% 40% 50% 60% 70%

Reduce Risk

Enhance Returns

Use of Uncorrelated Returns to Provide a Hedge

Fulfill Client Directive

Fulfill Practice Goal or Firm Initiative

Diversification

Income

Other (All of the Above, Impact, Relationship)


Has your opinion on the need for alternative investments changed as a result of the COVID-19 global pandemic?

23.8%

76.2%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Yes

No


Over the next 12-months how do you expect your clients’ alternatives allocation to change?

44.8%

2.4%

52.8%

45.3%

7.3%

47.4%

0% 10% 20% 30% 40% 50% 60%

The percentage will increase

The percentage will decrease

The percentage will stay the same

2020 2017


If it will increase, by how much and in which strategies?

84.9%

10.1%

5.1%

0% 50% 100%

It will increase between5% and 10%

It will increase between10% and 20%

It will increase by morethan 20%

% Increase

57.1%

56.3%

22.3%

24.1%

64.3%

57.1%

8.9%

0% 50% 100%

Private Equity

Real Estate

Venture Capital

Hedge Funds

Private Credit / Lending

Income Generating

Other (Royalty Income,ILS, Non-Correlated)

Strategies Planning to Increase Allocation


If it will decrease, by how much and in which strategies?

100.0%

0% 100% 200%

It will decrease between5% and 10%

It will decrease between10% and 20%

It will decrease by morethan 20%

% Decrease

22.2%

26.4%

20.8%

41.7%

13.9%

9.7%

16.7%

0% 50%

Private Equity

Real Estate

Venture Capital

Hedge Funds

Private Credit / Lending

Income Generating

Other (Non-Traded REITS,other needs for liquidity)

Strategies Planning to Decrease Allocation


If there is a 10% market correction next month, how do you anticipate your alternatives’ allocation would perform?

2.8%

47.2%

38.9%

11.1%

0% 10% 20% 30% 40% 50%

Performance would be down more than themarket

Performace would be down, but not as much asthe market

Performance would be relatively flat

Performance would be postive


What have been the largest operational obstacles/hurdles your firm has faced allocating to alternative investments?

54.2%

39.3%

24.3%

28.0%

15.9%

0% 20% 40% 60%

Team resources for manager due diligence

Subscription process

Gathering required documentation

Managing capital calls and distributions

Other (Custodians, Taxes, Reporting, ClientEducation)


What is the largest impediment of allocating to alternative investments among your clients?

53.3%

44.8%

12.4%

22.9%

12.4%

45.7%

40.0%

11.4%

0% 20% 40% 60%

Lack of liquidity

Clients lack of understanding of alternatives

Our firm has limited product offerings

Delays in reporting

Compliance is too burdensome

Long lock-up periods

K-1 tax reporting

Other (Manager Access, High Minimums, HighExpenses)


Who provides the consolidated reporting of your clients’ alternative investments?

53.3%

44.8%

12.4%

22.9%

0% 20% 40% 60%

Custodian

Internal reporting system

3rd party data aggregation service

Other (Managers, Black Diamond, Orion)


Does your back-office team utilize electronic subscription platforms?

62.3%

37.7%

0% 10% 20% 30% 40% 50% 60% 70%

Yes

No


Would you increase your allocation to alternatives if the fund could be in a retirement account?

69.5%

30.5%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Yes

No


THE VIEWS AND OPINIONS EXPRESSED IN THIS DOCUMENT SHOULD NOT BE CONSTRUED AS RECOMMENDATIONS, AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO ACQUIRE ANY SECURITY,INVESTMENT PRODUCT, OR SERVICE. ANY OFFERING OF SECURITIES WILL ONLY BE MADE PURSUANT TO A PRIVATE PLACEMENT MEMORANDUM OR SIMILAR DOCUMENT PREPARED BY THE PARTNERSHIPAND SUBSCRIPTION DOCUMENTS, ALL OF WHICH MUST BE READ IN THEIR ENTIRETY. THIS DOCUMENT TO BE USED BY INVESTMENT PROFESSIONALS ONLY.

THERE IS NO GUARANTEE THAT HISTORICAL RISK, RATES OF RETURN, OR PERFORMANCE SCENARIOS DISCUSSED WILL PERSIST IN THE FUTURE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURERESULTS. ALL INVESTMENTS ARE SUBJECT TO RISKS. PRIOR TO INVESTING, INVESTORS MUST FAMILIARIZE THEMSELVES WITH THE ENTITY OFFERING MATERIALS AND BE PREPARED TO ABSORB THE RISKSASSOCIATED WITH ANY SUCH INVESTMENT, INCLUDING A TOTAL LOSS OF ALL INVESTED CAPITAL. THE INFORMATION PROVIDED HEREIN IS NOT INTENDED TO REPLACE OR SERVE AS A SUBSTITUTE FORANY LEGAL, TAX OR OTHER PROFESSIONAL ADVICE, CONSULTATION OR SERVICE. PROSPECTIVE INVESTORS SHOULD CONSULT WITH A PROFESSIONAL IN THE RESPECTIVE LEGAL, TAX OR OTHERPROFESSIONAL AREA BEFORE MAKING ANY DECISIONS OR ENTERING INTO ANY AGREEMENTS PERTAINING TO THE ENTITIES DESCRIBED HEREIN.

PPB CAPITAL PARTNERS LLC AND ITS AFFILIATED PARTNERSHIP HAVE PREPARED THIS MATERIAL UTILIZING INFORMATION FROM THE UNDERLYING INVESTMENTS, GENERAL MARKET KNOWLEDGE, ANDADDITIONAL THIRD PARTIES, INCLUDING PROJECTED PERFORMANCE, AND TOOK REASONABLE CARE TO ENSURE THE ACCURACY OF THE INFORMATION. NEITHER PPB CAPITAL PARTNERS, LLC, ITSAFFILIATES, OR THE PARTNERSHIP WARRANTS ITS COMPLETENESS, ACCURACY OR ADEQUACY, AND IT SHOULD NOT BE RELIED UPON AS SUCH. THIS INFORMATION PROVIDED IN THIS DOCUMENT ISONLY A SUMMARY

AS OF THE DATE REFERENCED AND MAY OR MAY NOT BE UPDATED TO REFLECT SUBSEQUENT EVENTS. THE STATEMENTS INCLUDED IN THIS MATERIAL MAY CONSTITUTE “FORWARD-LOOKINGSTATEMENTS” AND ARE SUBJECT TO A NUMBER OF SIGNIFICANT RISKS AND UNCERTAINTIES. SOME OF THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKINGTERMINOLOGY SUCH AS “BELIEVES”, “EXPECTS”, “MAY”, “WILL”, “SHOULD”, “SEEKS”, “APPROXIMATELY”, “INTENDS”, “PLANS”, “ESTIMATES”, OR “ANTICIPATES”, OR THE NEGATIVE THEREOF OROTHER VARIATIONS THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. DUE TO THESE VARIOUS RISKS AND UNCERTAINTIES, ACTUAL EVENTS OR RESULTS OF THE ACTUALPERFORMANCE OF AN INVESTMENT MAY DIFFER MATERIALLY FROM THOSE REFLECTED OR CONTEMPLATED IN SUCH FORWARD-LOOKING STATEMENTS AND NO ASSURANCES CAN BE GIVEN WITHRESPECT THERETO.

SOME INFORMATION IN THIS DOCUMENT IS OBTAINED FROM VARIOUS SOURCES THAT PPB CAPITAL PARTNERS LLC BELIEVES TO BE RELIABLE, BUT IT MAKES NO REPRESENTATION OR WARRANTY WITHRESPECT TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. PPB CAPITAL PARTNERS, LLC’S RESPECTIVE OFFICERS, OWNERS, OR EMPLOYEES DO NOT ACCEPT ANY LIABILITY WHATSOEVERFOR ANY DIRECT OR CONSEQUENTIAL LOSS ARISING FROM ANY USE OF THIS PRESENTED CONTENT. THIS PRESENTED INFORMATION IS PRODUCED SOLELY FOR THE RECIPIENT AND MAY NOT BETRANSMITTED, REPRODUCED OR MADE AVAILABLE TO ANY OTHER PERSON. PPB ADVISORS, LLC, AN AFFILIATE OF PPB CAPITAL PARTNERS, LLC IS REGISTERED WITH THE UNITED STATES SECURITIESAND EXCHANGE COMMISSION (“SEC”) PURSUANT TO SECTION 203(C)(2)(A) OF THE INVESTMENT ADVISORS ACT OF 1940.

CERTAIN SECURITIES OFFERED THROUGH REGISTERED REPRESENTATIVE WITH HERALD INVESTMENT MARKETING LLC (MEMBER FINRA/SIPC), WHICH IS NOT AFFILIATED WITH PPB CAPITAL PARTNERSOR ITS AFFILIATES.

Disclosures & Key Risk Factors

The Bridge to Alternative Investments

PPB Capital Partners, LLC125 East Elm Street, Suite 200 Conshohocken, PA 19428PPBCAPITALPARTNERS.COM

Advisor Relations:484.278.4017 | [email protected]

WEALTH ADVISOR SURVEY RESULTS...10.1% 5.1% 0% 50% 100% It will increase between 5% and 10% It will...

Documents

Transcript of WEALTH ADVISOR SURVEY RESULTS...10.1% 5.1% 0% 50% 100% It will increase between 5% and 10% It will...