Financial advisers face a particular challenge selling alternative investment funds. Given full-disclosure requirements for such products, advisers need to learn a great deal about illiquid alternative investments contained in the funds. "We spend a lot of time with broker-dealers and advisers educating them how this fits in the client's portfolio," said Ray Lucia Jr., portfolio manager of the $35 million Multi-Strategy Growth & Income Fund, the largest such fund. "It's an alternative investment, while others are saying it's like a mutual fund."

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