The top five investment strategies that financial advisors are requesting in 2014 include income, multistrategy alternative, global/international equity, single-strategy alternative, and global tactical asset allocation, Zarker said.

Cerulli also found that managers are spending a great deal more time focusing on both active management and the development of multi-asset and alternative strategy products, despite the fact that passive product demand has grown. 

Passively managed mutual funds and ETFs, said the report, have burgeoned, with assets at less than $2 trillion in 2010 growing to more than $3 trillion in 2013. Despite that, "(p)roduct development activity for passive mutual funds has been far less robust than for active mutual funds; 492 new active and 18 new passive mutual funds were launched in 2013." 

In fact, according to Cerulli, "Nearly 90 percent of managers believe that institutional investors' allocations to passive investments during the next five years will account for 20 percent or more of their portfolios.

By contrast, 64 percent of managers expect that retail investors will allocate 20 percent of their holdings to passive strategies. Most managers do not plan to stray from their active management approach to develop strictly passive strategies."

Some managers, said the report, view passive products as a threat and as a major factor in their pursuit of alternative strategies. The great majority of both retail-focused managers (83 percent) and institutional managers (73 percent) are developing new active products that don't compete directly with passive strategies.

In addition, more than 70 percent of managers are advocating active strategies and working to develop products that make the case for active management and offer the potential for greater returns, for instance by focusing on emerging markets.

Managers are also not happy with the rate at which advisors are taking to alternative strategies, feeling that it is too slow and definitely does not reflect the efforts that managers are putting into the development of these products and educational initiatives surrounding them.

Also among the findings is the fact that, despite both retail and institutional clients' pursuit of lower-fee strategies and the SEC's "ongoing attention to fees," most managers, instead of making fee cuts a priority, instead are focusing on "product development and retention activities aimed at preserving and increasing fee revenue."

Notably, more than two-thirds (67 percent) of managers that emphasize retail channels are generating thought leadership on the attributes of active investment strategies to combat competitive threats."