Retail Advisers Ditching Private Assets as Workload Outstrips Fees

Retail financial advisors are increasingly withdrawing from private markets strategies as the operational complexity and administrative burden of managing these assets have begun to outpace the fee revenue generated. According to Casey Quirk analysis, median revenues at firms managing private assets for retail clients declined 4% between 2021 and 2022, a period when private markets adoption among retail channels was accelerating. This margin compression reflects a fundamental misalignment: advisors must dedicate substantial resources to compliance, client education, portfolio monitoring, and operational infrastructure to service private assets, yet the fee structures have not adjusted proportionally to compensate for this increased workload.

The fee structure for retail private markets access presents a particular challenge for advisors. Tender offer and interval funds, which represent increasingly popular vehicles for retail exposure to private equity and credit, charge management fees reaching up to 5.49%—substantially higher than traditional mutual funds and ETFs. While these fees appear competitive within the alternative asset space, advisors struggle to justify the operational burden relative to compensation when accounting for the specialized compliance requirements, liquidity constraints, and client communication overhead associated with semi-liquid and illiquid holdings.

In response to sustained advisor demand, however, over half of asset managers and third-party strategist model providers have launched or are actively considering asset allocation model portfolios that incorporate semi-liquid and illiquid alternatives, according to research from Cerulli Associates published in April 2026. This shift reflects recognition that advisors remain motivated to offer private markets exposure but require structural solutions to manage complexity. Unified Managed Accounts (UMAs) have emerged as the preferred mechanism to simplify adoption. By centralizing alternative asset selection and allocation decisions within a single managed account infrastructure, UMAs reduce operational friction and inject professional decision-making into alternative portfolio construction, thereby lowering the advisor workload while maintaining product sophistication.

Education remains a critical constraint on broader adoption. Over 30% of financial advisors report needing additional training on discussing alternatives with clients (47% of participants), portfolio construction methodology (41%), market strategy guidance (32%), and sophisticated exposure structures (31%). Baseline asset-class education is valued by 29% of advisors, indicating that operational and knowledge barriers persist even among advisors motivated to expand private markets offerings. These findings suggest that while the infrastructure for retail private markets access continues to develop, advisor compensation models and education ecosystems have not yet aligned with the complexity and workload demands of the retail channel.