Regarding ownership of alternative asset classes, real estate has no rival. Fully 77% of millionaire investors say they own it, and 35% say they own a related investment, Real Estate Investment Trusts (REITs). This is a key finding of the Morgan Stanley Wealth Management Investor Pulse Poll, a periodic survey of U.S. high net worth investors, including a subset of households with a million dollars or more in financial assets. 1 Questions about investments in alternative asset classes were posed only to the millionaire sample.
The survey found that investors who received advice from a financial advisor are much more likely to say they were knowledgeable about alternative asset classes (57%), compared with those who have not received professional advice (30%).
“This finding underscores the important role financial advisors play in providing information and education about the potential use of alternative asset classes by suitable investors in an appropriately diversified investment plan,” said Andy Saperstein, Head of Investment Products and Services for Morgan Stanley Wealth Management.
After real estate and REITs, millionaire investors cite ownership of collectibles (34%), followed by precious metals (28%), private equity (27%), real assets (oil, gas, mining, 17%), private real estate funds (16%), hedge funds (16%), and venture capital (13%).
Asked to recall an alternative investment unaided, 77% of millionaires can recall at least one (led by hedge funds, at 19%), while the remainder (23%) said they could not recall an alternative without prompting.
As with actual ownership, real estate (33%) and REITs (23%) lead the list of alternatives the surveyed investors expect to buy in 2014, followed by collectibles (20%), private equity (19%) and precious metals (16%).
Investors who work with financial advisors say their advisors are well informed about alternative asset classes. Nearly seven out of ten (68%) say their advisors are knowledgeable about alternatives, and four in ten (41%) say their advisors are “very knowledgeable.”
Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and investment advisory services, financial and wealth planning, banking services, annuities and insurance, retirement and trust services.
Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 1,200 offices in 43 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.
For the full Morgan Stanley Wealth Management Investor Pulse Poll, go to www.morganstanley.com.
1 Survey Methodology: 1,004 U.S. investors, age 25 to 75, with $100,000 or more in investable household financial assets. A third of those interviewed had $1 million or more in household financial assets. Poll conducted by GfK Public Affairs October to December 2013.
Poll commissioned by Morgan Stanley Smith Barney LLC (“Morgan Stanley”) but independently conducted by GfK Public Affairs October to December 2013.
Real estate investments are subject to special risks, including interest rate and property value fluctuations, as well as risks related to general and economic conditions.
REITs investing risks are similar to those associated with direct investments in real estate; lack of liquidity, limited diversification, and sensitivity to economic factors such as interest rate changes and market recessions.
Alternative investments are speculative and include a high degree of risk. An investor could lose all or a substantial amount of his/her investment. Alternative investments are suitable only for qualified, long-term investors who are willing to forgo liquidity and put capital at risk for an indefinite period of time.
Diversification does not assure a profit or protect against loss in declining financial markets.
Media Relations Contact: James Wiggins, 914.225.6161
CRC 803846 (01/14)