Why Advisors Must Be Private Market Gatekeepers

Public markets are no longer the ideal growth platform they once were for many companies. The challenges of being a public company, including heightened regulatory requirements and short-term market pressures, put strain on businesses and sometimes limit their growth potential.

Regulatory costs alone represent more than 3% of a company’s equity value on average, according to the Cato Institute. Many high-growth companies are choosing to avoid the public markets altogether, instead opting for the flexibility and patient capital that private markets offer.

In fact, 87% of companies generating $100 million or more in annual revenue are private, underscoring the viability of alternate paths to corporate success.

This shift has reshaped the public market landscape. There are 40% fewer public companies in the United States than there were three decades ago, and the Wilshire 5000 — a benchmark meant to reflect the entire stock market — now tracks only 3,687 companies.

Value creation and wealth generation are increasingly happening outside the traditional public exchange system, reshaping where and how investors can find opportunity.

Democratization of Private Markets 

Another significant shift is the broadening of the private market investor base. What was once the exclusive territory of pension funds, endowments and ultra-high-net-worth individuals is now trickling down to the average investor’s portfolio.

Through structures like interval funds, tender offer funds and private market feeder vehicles with lower minimums, access to private assets is expanding.

According to Bain & Company, retail investors hold about 50% of global assets under management but represent less than 20% of assets under management in private investment funds, including private equity. However, interest is accelerating.

A 2025 Apex Group survey found that 97% of asset managers report strong or moderate retail interest in private markets, with 67% citing private equity as the leading area of demand.

In many ways, this democratization is a positive development. It provides more investors the chance to participate in an asset class that has historically delivered higher returns and portfolio diversification. However, it also introduces new risks.

Private market investments are fundamentally different from public equities: they lack daily liquidity, have longer time horizons, and can carry complex fee structures and wide dispersion in returns. Many retail investors are not fully prepared for these differences without additional education and guidance.

Supporting Clients Within Private Markets

As private markets become more accessible, an advisor’s role becomes even more critical. Advisors must help clients navigate the opportunities thoughtfully, recognizing both the upside potential and the distinct risks involved.

According to Hamilton Lane, nearly 60% of financial advisors plan to allocate 10% or more to private market investments this year — an increase of 15 percentage points over the year prior. Additionally, 76% of advisors surveyed reported that their clients view private markets as providing higher reward compared to traditional stocks and bonds.

Despite this interest, private assets are not suitable for all retail investors.

Before considering integrating private assets into a client’s portfolio, advisors should consider criteria such as risk tolerance, investment horizon, portfolio size, financial sophistication and liquidity needs. For example, clients who have shorter-term financial goals or may need access to funds quickly should avoid private assets.

However, if an investor is more experienced, has a larger portfolio and is investing with a long-term horizon, private assets can provide potential benefits — differentiated sources of return and access to high-growth companies earlier in their lifecycle.

Even for suitable investors, private markets should only complement a diversified investment strategy — not dominate it. Without thoughtful advisor guidance, clients could over-allocate to private assets as minimums are becoming more attainable.

To avoid this, advisors must conduct due diligence on emerging products, educate clients about the true risks of private investments and ensure that these assets are properly integrated into broader portfolios.

The direction of wealth creation and maintenance is increasingly private. However, as access expands, expect heightened regulatory scrutiny to focus on this influx of new investors. Advisors must embrace their roles as gatekeepers to help clients access these opportunities prudently, balancing innovation with fiduciary responsibility.

Lou Maiuri is chair and group CEO of AssetMark, a provider of wealth management and technology solutions for advisors.
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Investments in primary markets can be speculative and involve a substantial degree of risk, including the risk of complete loss. Advisors should conduct a review of private markets investments to determine that they are appropriate for their client’s financial circumstances and evaluate the potential risk of loss.

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