February 10, 2014

Millionaires’ Favorite Alt Investment: Real Estate

Morgan Stanley poll finds investors who work with advisors know more about alternatives

(Photo: AP) (Photo: AP)

Millionaire U.S. investors by a wide margin favor real estate as an alternative investment, according to Morgan Stanley Wealth Management’s latest Investor Pulse Poll.

Seventy-seven percent of survey respondents said they owned real estate, and 35% said they owned real estate investment trusts.

GfK Public Affairs polled 1,004 U.S. investors, age 25 to 75, with $100,000 or more in investable household financial assets during the fourth quarter. A third of those interviewed had $1 million or more in household financial assets, and only this subset of households was asked about alternative asset classes.

The survey also found that 57% of investors who received advice from a financial advisor said they were knowledgeable about alternative asset classes, compared with 30% who had not received professional advice.

“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,” Andy Saperstein, head of investment products and services for Morgan Stanley Wealth Management, said in a statement.

After real estate and REITs, the next most popular alternative investment was collectibles — 34% of millionaires said they oened them. Twenty-eight percent own precious metals, 27% private equity, 17% real assets (oil, gas and mining), 16% private real estate funds, 16% hedge funds and 13% invest via venture capital.

As with actual ownership, real estate and REITs led the list of alternatives survey respondents expected to buy in 2014, followed by collectibles, private equity and precious metals.

Sixty-eight percent of investors who worked with financial advisors said their advisors were knowledgeable about alternative asset classes, and 41% said their advisors were “very knowledgeable.”

Millionaire U.S. investors by a wide margin favor real estate as an alternative investment, according to Morgan Stanley Wealth Management’s latest Investor Pulse Poll.

Seventy-seven percent of survey respondents said they owned real estate, and 35% said they owned a related investment, REITs.

GfK Public Affairs polled 1,004 U.S. investors, age 25 to 75, with $100,000 or more in investable household financial assets during the fourth quarter. A third of those interviewed had $1 million or more in household financial assets, and only this subset of households was asked about alternative asset classes.

The survey also found that 57% of investors who received advice from a financial advisor said they were knowledgeable about alternative asset classes, compared with 30% who had not received professional advice.

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,” Andy Saperstein, head of investment products and services for Morgan Stanley Wealth Management, said in a statement.

After real estate and REITs, 34% of millionaire investors cited ownership of collectibles, 28% precious metals, 27% private equity, 17% real assets (oil, gas and mining), 16% private real estate funds, 16% hedge funds and 13% venture capital.

As with actual ownership, real estate and REITs led the list of alternatives survey respondents expected to buy in 2014, followed by collectibles, private equity and precious metals.

Sixty-eight percent of investors who worked with financial advisors said their advisors were knowledgeable about alternative asset classes, and 41% said their advisors were “very knowledgeable.”

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