Canadian investors struggle with understanding alternatives

A survey of 700 Canadian investors with at least $100,000 in investable assets reveals a significant gap between ownership and understanding of alternative investments. While 55.3% have invested in alternatives, only 22.6% describe themselves as very or extremely familiar with the term. This highlights how quickly investors have adopted these assets without fully grasping their intricacies.

The Franklin Templeton Alternatives Survey, conducted between August 27 and September 9, 2026, found that investor confidence varies widely across different aspects of alternatives. Respondents expressed the most confidence in returns (49.7%) and risk (49.6%), but this dropped sharply for liquidity (42%) and fees (38.4%), where understanding is weakest.

This lack of clarity has tangible implications. Investors unsure about liquidity may react poorly during gate events, common in private funds. Similarly, opaque fee structures could deter participation despite strong returns. The survey suggests that client education on these specifics is as key as expanding access to alternatives.

Private real estate leads in familiarity and trust, with 66.7% claiming at least moderate understanding and 83.6% viewing it as legitimate. Digital assets and cryptocurrencies, while familiar to 58.3%, are seen as high-risk by 85.6%, with only 46.2% considering an allocation.

Private credit and private infrastructure, despite advisor promotion, rank lowest in familiarity, with 41.6% and 32.7% recognizing them, respectively. However, infrastructure attracts 55.7% of those familiar enough to respond, indicating awareness, not rejection, is the primary challenge.

Financial advisors are the most trusted source for alternatives guidance, with 73.7% relying on them, far surpassing financial media (28.4%) and social media influencers (distrusted by 66.1%). This aligns with Franklin Templeton Canada’s strategy, emphasizing advisor education to broaden alternatives access.

Investors seek clarity on fees, verifiable performance, and advisor recommendations to feel more comfortable with alternatives. Access through familiar fund or ETF structures is also preferred, with most respondents favoring these over direct private investments.

When asked about next steps, 34.7% plan to consult their advisor for more information, while others await their advisor’s initiative. Only 12.6% admit not knowing where to start. The results indicate Canadian investors are open to alternatives if advisors address gaps in fees, liquidity, and complexity.

As Franklin Templeton Canada expands private market access through its Quotential portfolio, the survey suggests market infrastructure may outpace investor understanding. Advisors will play a critical role in closing this gap to fully realize the opportunity.