Should you use private markets? – Delio in the FT Adviser

Delio’s chief executive, Gareth Lewis, recently highlighted why financial advisors shouldn’t shy away from private markets. Instead, there is a strong argument for advisors to open up access to more classified investors beyond the traditional HNW audience.*

Private markets are increasingly important to investors who want to access opportunities outside of the traditional indices or funds. Advisers who are reluctant to consider these markets because they expect compliance and regulation to be too burdensome should think again.

Regulatory governance around this market remains a complex topic. It is a critical factor why many advisers may lack the confidence to offer these investment opportunities to their clients and why there is a general tendency to keep this sector exclusively for those who are ultra-high net worth (UHNW) or sophisticated in the space.

Yet, the increased use of technology to manage compliance issues across private markets investments has changed this environment. Unlike before, advisers no longer have to grapple with pages of client notes to determine which clients these particular types of investments are appropriate for. Instead, digital tools can help businesses to robustly manage the most crucial regulatory requirements and generate valuable client insights.

Client demand brings private markets into the mainstream

While there is a relatively small pool of UHNW clients worldwide, there is a growing number of clients who could be a receptive audience for private markets investments.

Accredited investors already qualify for privately listed opportunities, but the past decade has seen a significant number of other investors take proactive steps to diversify their portfolios through alternative investments. This trend is commonly referred to as the democratisation of private markets.

*This article first appeared on FT Adviser on 02 November and was written by Gareth Lewis from Delio. You can access the full article here.