SEC Proposes Rules to Expand Retail Investor Access to Private Markets
The Securities and Exchange Commission has proposed new rules to give retail investors access to private market investments previously reserved for institutional and wealthy investors. The proposal comes as 55 percent of registered investment advisor client assets are now held in model portfolios, according to a new survey.
The Securities and Exchange Commission has proposed new rules that would expand retail investor access to private market investments.
Private markets, which include private equity, private credit, and real estate funds, have historically been available only to institutional investors and high-net-worth individuals. The SEC's proposal would open these asset classes to a broader range of everyday investors.
The move comes as the wealth management industry shifts toward model portfolios. A survey of 560 financial advisors by FUSE Research Network found that 55 percent of registered investment advisor client assets are now invested in model portfolios. Advisor-built models account for 51 percent of those assets.
Wealth managers say private markets offer diversification benefits that are difficult to achieve through public stocks and bonds alone. However, they also note that private investments carry liquidity risks that require careful management.
The SEC proposal is part of a broader effort to modernize investment regulations. Supporters say it would help everyday investors build wealth through asset classes that have historically delivered strong returns. Critics warn that private markets are less transparent and harder to value than public securities.
Charles Schwab also made news in the financial planning industry, increasing the minimum asset size for its Advisor Network referral program. Some advisory firms are now reevaluating their custodial relationships as a result.
