In a Forbes article, Brian Hundler discussed the growth of alternative investing in recent years and the strong momentum for this nascent asset class. He attributes technology and the globalization of markets as major factors for making these investments available to a wider category. 

Alternatives investments encompass private equity, hedge funds, real estate, commodities, and cryptocurrencies. They tend to be less liquid and riskier but also have the potential for higher returns. For investors with a higher risk profile, they can certainly be part of a diversified portfolio. 

Many cite the past decade of zero interest-rate policy as the driving force behind the growth of alternative investing as it forced many investors to get creative and enhance risk in the search for yield. Another factor is increased demand for diversification as alternative investments have low correlations with traditional assets. 

The final piece in the growth of alternative investing is that technology has made these investments accessible to smaller investors, while they were only previously available to high-net worth investors due to logistical and regulatory hurdles. 

Finsum: Alternative investments are booming. Read more to find out why, and how it can enhance returns and diversification.

In an article for SmartAsset, Wola Odeniran shared some lessons for advisors from working with high net-worth clients. 

The first lesson is that nearly everyone needs an estate plan regardless of their financial status. Many instinctively think that such planning is only necessary for wealthier individuals and families. However, estate planning is the foundation for attaining financial security. It can also help advisors build trust and differentiate themselves from competitors. 

The second lesson is that it is always helpful and valuable to get outside advice. Many high net-worth clients are very successful in their fields, yet they are willing to hire and defer to advisors. Advisors can use this as an example when explaining to potential clients about the benefits of working together. 

The third lesson is that index funds can be a foundation for portfolios. Many high net-worth investors stick to indexing given the low costs and forced diversification. However, these are a good fit for any portfolio regardless of net worth, yet many clients fail to take advantage of index funds. 

The final lesson is that money without financial planning does not lead to happiness. Many high net-worth clients see their wealth disappear due to a lack of planning, while those with fewer assets are able to live peacefully in retirement with little financial stress. 

Finsum: Here are some lessons that financial advisors can learn from high net-worth clients to improve their practice and convert prospects into clients.

In an article for Kiplinger, Martin Nuss discussed the benefits of owning annuities. First, it’s important to distinguish between the many types of annuities. For example, savings-oriented deferred annuities offer tax benefits and guaranteed principal. In contrast, income-based annuities function similar to private pensions and provide guaranteed retirement income. 

A pressing concern for future retirees is that social security benefits are not going to be sufficient to meet most people’s retirement needs. And, this is before accounting for the aging population and shortfall between revenue and expenditures. 

Annuities are a great solution, because it lets you save and grow money without worrying about taxes. While younger investors have risk tolerance and are willing to stomach the risk required to generate strong returns, older investors have to be more mindful of risk. Therefore, there is more demand for less volatile investments like annuities. 

For investors with less risk tolerance, fixed-rate annuities are a good choice. They function like tax-deferred bank CDs, albeit with higher returns. Annuities aren’t federally insured but tend to be offered through reputable insurance companies. Fixed-indexed annuities are ideal for retirees who are looking for short-term cash flow, while they wait for their pension or social security payments to begin. 

Finsum: Annuities can offer so much value to investors to help them reach their financial goals. Yet, it can be difficult given the variety of offerings.