Structured Notes Growing in Popularity Among FAs
By: Joe Palmisano
There has been significant growth in interest among financial advisors in structured notes in recent months. Many advisors who already have allocations are seeking to expand them as a means of diversification, according to alternatives platform CAIS.
Structured notes, accessible to both accredited and non-accredited investors, may offer advisors flexible investment solutions to dampen volatility, provide outsized returns, or enhance income in client portfolios.
Based on a survey conducted in 2023 by CAIS-Mercer, which involved more than 250 independent advisors, around one-third of the participants now invest in structured notes. Additionally, a quarter of the respondents have intentions to grow their investments by 2025.
Simultaneously, there has been a noticeable surge in demand for advisors on the platform. In the first quarter of 2024, there was a 46% rise in the number of advisors allocated to structured notes compared to the same period the previous year. Furthermore, the volume of structured notes on the platform has surpassed that of the wider industry during this time.
“Structured notes have emerged as an integral part of an advisor’s toolkit by providing the potential for yield, growth, and/or protections,” Marc Premselaar, head of structured investments at CAIS, said. “We view these products as another core alternative to help advisors achieve outcomes for their end-clients, and our technology is paving the way in ensuring these solutions are both accessible and well-understood.”
In response to this growing demand, Osaic, a wealth management solutions provider with over $500 billion in assets under administration, recently expanded its collaboration with CAIS to offer its structured notes products. This comes less than a year after Mariner and CAIS announced an expanded cooperation to bring the independent wealth channel to Mariner’s separately managed accounts (SMAs).
CAIS has offices in New York, Los Angeles, London and Austin, Texas, and serves more than 34,000 advisors overseeing more than $4.5 trillion in network assets.