Wealth Channel's Alt Adoption Is Still in Early Innings

What's New

Only 40% of financial advisors have ever discussed alternatives with their clients, even as millennial investors are already allocating 20% of their portfolios to the asset class. In a conversation at the Goldman Sachs Alternatives Summit on the Alt Goes Mainstream podcast, Kristin Olson, Global Head of Alternatives for Wealth at Goldman Sachs Asset Management, laid out how a 25 year old playbook built for ultra high net worth clients is being repackaged for mass affluent investors through evergreen structures, model portfolios, and platform partnerships, while a generational demand shift is pulling private markets into mainstream portfolio construction faster than most advisors realize.

Why It Matters

The wealth channel represents the largest untapped growth vector for alternative asset managers, but Olson's data reveals a fundamental disconnect: clients are hearing about alternatives through financial media and bringing the conversation to their advisors, not the other way around. With tens of trillions in intergenerational wealth transfer ahead and millennials already demonstrating higher alt allocations than older generations, the firms that solve for education, simplified implementation, and scalable product structures will capture disproportionate share of a market Olson describes as "very, very early" in adoption.

Memorable Quotes

• On the education gap: "Most of the people we surveyed were covered by a financial professional, but only 40% of those professionals had ever spoken to them about alternatives." Olson highlights the staggering disconnect between client demand and advisor engagement, suggesting the bottleneck to wealth channel adoption is not product availability but the advisory conversation itself.

• On generational motivation: "For the millennials, it was about access to growth industries, access to unique investment opportunities. Whereas Gen X and boomers, it was for diversification." Olson reveals that younger investors aren't treating alternatives as portfolio ballast but as their primary vehicle for accessing innovation and wealth creation happening in private markets.

• On where we are: "I think we're early, early innings... Most advisors aren't even talking about alternatives with their clients." Despite 25 years of ultra high net worth adoption, Olson argues the broader wealth channel is barely past the starting line, constrained by product structure limitations that have only recently been addressed.

• On the real advantage: "Not just delivering them an alternative investment product, but providing them the guidance around how to think about that in a portfolio and how to construct a portfolio." Olson frames Goldman's edge not as product manufacturing but as the ability to pair strategic asset allocation advice with implementation infrastructure across public and private markets.

• On the liquidity trap: "Even if there is a modicum of liquidity that may be offered, you don't want to have to avail yourself of that because it's likely not going to be available when you most need it." Olson delivers a pointed warning to new alt investors that evergreen structures should not be confused with liquid investments, urging strategic allocation sizing over reliance on redemption features.

Big Picture Drivers

• Advisor conversation gap: The majority of financial professionals have never raised alternatives with their clients, creating a massive addressable market that requires education infrastructure before product distribution can scale.

• Generational demand shift: Millennials are allocating to alternatives at higher rates than older generations and for fundamentally different reasons, seeking growth and innovation access rather than traditional diversification benefits.

• Product structure evolution: The industry is rapidly moving from closed end drawdown funds through evergreens to tender offer funds, interval funds with tickers, and early discussions about alt ETFs, each wave broadening the accessible investor base.

• Platform convergence: Goldman's combination of OCIO capabilities, the GeoWealth technology partnership, and the Industry Ventures acquisition creates a vertically integrated stack from asset allocation advice through product manufacturing to turnkey implementation.

• Concentration then diversification: Wealth channel investors are expected to consolidate around a few large platforms initially for guidance and education, then diversify manager relationships over time as their comfort with the asset class deepens.

By The Numbers

• 20%: Millennial allocation to alternatives, the highest among generational cohorts surveyed by Goldman Sachs.

• 40%: Share of financial advisors who have ever discussed alternatives with their clients, despite most clients being covered by a professional.

• $540B: Goldman Sachs alternatives assets under supervision, spanning the full spectrum of private equity, credit, real estate, and infrastructure strategies.

• 25+ years: Duration of Goldman's alternatives for wealth practice, dating back to when the category was internally called "special investments."

• #1: Financial media ranked as the top source of information about alternatives across all generational cohorts, ahead of financial advisors.

Key Trends to Watch

• Model portfolios as accelerant: The next wave of wealth channel adoption will be driven by turnkey implementation tools that let advisors allocate to pre constructed alt portfolios rather than selecting individual funds, dramatically reducing the complexity barrier.

• Credit as gateway strategy: Wealth channel flows are concentrating in yield oriented private credit strategies first, establishing a predictable adoption sequence where income products build comfort before investors diversify into equity, infrastructure, and venture.

• Media driven demand inversion: Clients learning about alternatives through financial media before their advisors raise the topic is creating a pull dynamic that will pressure advisory firms to build alt capabilities or risk losing relevance with younger, wealthier clients.

• Hybrid product frontier: Conversations around alternatives in ETF wrappers, interval funds with tickers, and public private hybrid products signal that the structural innovation cycle is far from over and will continue to lower access barriers over the next three to five years.

The Wrap

The wealth channel's adoption of alternatives is being driven from the demand side by informed clients rather than the supply side by prepared advisors, creating an urgent imperative for both asset managers and advisory platforms. Firms that invest in scalable education, simplified implementation through model portfolios and technology partnerships, and product structures calibrated to different wealth tiers will capture the largest share of a market that by Olson's assessment remains in its earliest innings. The playbook is clear: start with strategic allocation guidance, lead with yield strategies to build comfort, then expand across the alternatives spectrum as client sophistication deepens.

Watch Full Episode: Goldman Sachs' Kristin Olson on Alt Goes Mainstream