Good morning.
These days, alts have started to feel a lot less … well, alternative.
For advisors across the country, the case for alts is getting harder to ignore, and the pressure is shifting from whether to use them to how.
It’s a shift that Mark Mezzanotte, Head of Private Wealth Solutions at iCapital, has been watching up close. We caught up with him at Schwab Impact 2026 to understand where alts are headed and what it takes for advisors to move from interest to action.
Ready? Let’s talk alts.
Mark Mezzanotte on the State of Alts in 2026
The Daily Upside: How should advisors be thinking about alternatives right now?
Alternatives have really become part of the daily business of an independent advisor. We’re 10, 12 years into this adoption cycle now, and advisors think about it less as “should I do this” and more as “how do I do this.” The whole conversation has moved from curiosity to scaling and real portfolio construction.
The Daily Upside: The independent channel has been growing quickly. How has its use of alts evolved?
It’s interesting, actually, when you think about where iCapital started. We began in the independent channel. Most people don’t know this, but 13 years ago iCapital was created to be an OCIO for independent advisors who didn’t have the same infrastructure the big wirehouses had. We were their avenue for education, allocation, and execution, so we’ve followed this channel closely from the start.
And what we’re seeing is advisors using alts in two ways, really. The first is portfolio construction, just building a genuinely more diversified portfolio. The second is as a way to grow the business. There’s an adage, and it’s true: if you’re not talking to your clients about alternatives, someone else is.
So yes, it’s a differentiation story and a competitive story, but at the core it’s a portfolio construction story, because the market’s evolved and you really do need alternatives today to be fully diversified.
The Daily Upside: Smaller independent firms don’t have the same due diligence resources as larger firms. What opportunities do you see for them with alts?
This goes right back to our origin story. Beyond helping independent advisors build better portfolios and being that outsourced thought and execution partner, we’ve built the industry’s largest independent due diligence team.
So if an advisor wants to dig into research, understand why a report reads the way it does, compare one fund against another, or figure out what actually fits their current holdings, we’re staffed to walk them through it. Because honestly, education is probably the most important topic for the next few years.
The Daily Upside: What challenges do advisors face when it comes to alts adoption?
Like I said, education. They know they want to use alts, but these products trade differently. They feel different from just buying and selling a ticker. There are subscription documents, there are suitability standards.
So the real question for us is, how do we help advisors feel more confident? And that starts with having the whole toolkit: online videos, white papers from us and from our GP partners, portfolio construction tools like Architect that let an advisor stress test an alternative fund right inside an existing portfolio.
Then our sales team goes and sits with the advisor, builds that trusted relationship, and takes it from text to life, whether that’s through our desk, our hybrid resources, or our wholesalers in the field.
The Daily Upside: Alternatives aren’t new, and there are more ways to access them than ever. Do advisors feel like they’ve missed the boat?
If anyone feels that way, they shouldn’t, though I get it, the fear of missing out is real. We have it about everything in life.
But look at what’s happened just in the past few years: there’s been this real proliferation in product structure and in asset and sub-asset classes. Suitability requirements have gotten easier for sub-accredited investors. Even the trading has gotten simpler to use and understand. So to any advisor who thinks they’ve missed it, I’d say it’s actually a great time to get engaged, because this is probably just getting started.
The Daily Upside: Is there a gap between advisors’ interest in alts and their willingness to recommend them to clients?
Our 2026 global advisor survey tells us 89% of advisors intend to either maintain or increase their alts usage, and 39% say they’ll increase it. Now put that in context: about 55% of independent advisors are using alternatives today, at a rate of roughly 10% of their clients. So about half of advisors have gone to 10% of their clients and put alts in their allocation. Marry those together and the trend is only going to pick up.
And here’s the part I find interesting, about 80% of advisors also told us their clients have asked them about alternatives. So it’s not just advisors wanting to do more of this; it’s clients asking for more of it. That’s the inflection point, and we’re seeing it happen right now.
The Daily Upside: What sets apart the clients who already have alts in their portfolios?
Generationally, there’s a real divide. Baby boomers and up, your retirees and pre-retirees, they’re looking for income and lower volatility. But millennials and the younger generations? They see alternatives as growth and innovation, and really the only place to get it.
Think about the raw data: since 2000, the number of publicly traded companies has dropped from around 8,000 to about 4,500, while private companies with revenues of $100 million or more have grown to just shy of 13,000. The younger generation grew up with these companies, the Stripes, the Metas, the Ubers. A lot of them genuinely think private markets are safer than public ones, more growth-oriented, more innovative. It fits how they see the world.