The world of financial advising is vast and can be difficult to navigate, whatever one’s area of expertise. Despite the rigorous training that goes into financial advisory positions, many still feel like education is lacking in their field when it comes to alternative investments. In a recent study conducted by Natixis 75% of financial advisors admitted a need for more education.
In the realm of alternative investments, the report by Natixis revealed that advisors feel their clients have little understanding of them. While this is in part due to the complexity of the industry, not all advisors themselves have a solid understanding of alternative investments. With the onus of educating clients falling to financial advisors, knowledge is a key factor in the success of both parties.
While some regulations are already in place, it is not necessarily standardized. FINRA requires broker-dealers to establish a formal training program for their registered persons to keep them up to date on products and job-related subjects. however the type of education and topics covered may vary by firm. There is alternative investment knowledge available to those who seek it. AI Insight offers its broker-dealer members tools to help provide their financial advisors with regulatory-compliant education and training specifically on alternative investments. By improving education on the subject, broker-dealers can attract top advisors who can better serve their clients.
For wholesalers, the depth and quality of resources also varies by firm. Like sponsors, wholesalers can increase their knowledge of alternative investments by accessing white papers and webinars that are offered by various trade associations. Since wholesalers provide a lot of information on the products they distribute, it is important that they be well educated and educate advisors in order to forge lasting relationships and establish trust.
REISA provides training through webinars and regional meetings for members. For those wishing to increase their knowledge of direct participation programs, it also offers a Direct Participation Professional designation that can be obtained through completing courses and passing examination.
IPA has a suite of E-learning courses designed for advisors who are new to Direct Investments and a proficiency certification series. IPA also offers an advanced education series, which covers how to explain the benefits of direct investments to clients, among other topics.
FSI offers its members access to topical white papers through its online resource center along with industry updates and marketing materials.
In a nutshell, financial advisors all over the globe are feeling insecure about their level of education, specifically when it comes to using alternative investments. There are a number of trusted educational resources on the market that have the potential to offset this insecurity, not only for those interested in alternative investments, but for financial advisors at large and in all of their capacities.