Professionally Position Alternative Investments Within Your Process

Important Risk Disclosure

This white paper discusses investing in alternative investments. Alternative investments are investments that do not fall into traditional categories like public stocks, ETFs, mutual funds, standard bonds, or cash. They include private equity, real estate, commodities, hedge funds, and collectibles, which are often complex, illiquid, typically include higher fees, may be highly leveraged, engage in speculative investment techniques and are not suitable for all investors. Consult your firm's internal product development and compliance departments to determine your ability to discuss or offer alternative investments. Please see other important risk considerations at the end of this document.

Risk Considerations

Investing in alternative assets involves higher risks than traditional investments and is suitable only for experienced sophisticated investors. The value of an alternative investment may fall as well as rise and investors could lose all or a substantial amount of an investment. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing.

The scenarios throughout this whitepaper are illustrative composites drawn from recurring themes surfaced in conversations with financial advisors. They do not depict specific individuals, clients, or firms, and the quotations included are not verbatim transcripts. They represent characteristic language, sentiments, and concerns that emerged repeatedly across our conversations, synthesized into representative scenarios for clarity and readability.

This whitepaper reflects the current opinion of the authors. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security. The information provided is for illustrative purposes only and is not intended to be a recommendation or endorsement of any specific strategy, acceptable risk tolerance, return profile, action, or product. The concepts discussed may not be applicable in all situations and should not be considered a substitute for individualized advice. Financial professionals should continue to follow their firm’s established compliance procedures and consult with their compliance department for guidance on relevant regulatory restrictions and before implementing any new approaches.

Chris Jeppesen, a co-author of this white paper, is affiliated with First Trust Portfolios L.P., a FINRA registered broker-dealer. First Trust Portfolios acts as a private placement agent to certain private offerings and distributor of other alternative investments. Some private offerings and other alternative investments may be issued by an affiliate of First Trust Portfolios. First Trust Portfolios will benefit from any investment in a private offering where it acts as a placement agent and other alternative investments where it acts as a distributor. In addition, First Trust Portfolios affiliate will benefit from any investment in a private offering or fund it manages.