Regulatory Hurdles Deter Advisers from Private Markets

Team S · 2024-11-08T12:03:34.000Z

Financial advisers are increasingly hesitant to recommend private market investments to their clients due to the complex regulatory landscape, according to a recent study by Schroders. The survey, which included responses from 770 advisers across 18 countries, revealed that 39% of advisers cite regulatory challenges as the primary reason for avoiding private assets. The study highlighted that 37% of advisers find it difficult to explain private market investments to their clients, while 35% are concerned about the lack of liquidity in these assets. Despite these challenges, there is growing interest in private markets, with 28% of advisers planning to increase their allocation to private assets over the next year. The survey also found that 34% of advisers believe private assets can help generate alpha, while 33% view them as a means to diversify portfolios. However, the perceived regulatory burden remains a significant barrier to entry for many advisers. In terms of specific private market sectors, infrastructure emerged as the most popular, with 39% of advisers expressing interest. This was followed by private equity at 34% and private debt at 31%. The findings underscore the growing importance of private markets in investment portfolios, but also highlight the need for clearer regulatory guidance and improved education to help advisers navigate this complex landscape.

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Regulatory Hurdles Deter Advisers from Private Markets | Newnex