Why Advisors Should Offer their HNW Clients Private Market Investments

Private market investments are increasingly gaining traction with high-net-worth investors. And for good reason. Private market investments appeal to investors who seek more income, higher capital appreciation, and more degrees of flexibility through a broader selection of asset classes. 

With a higher level of complexity and concerns around liquidity, however, penetration rates for private market investments among advisors remain low. While institutions allocate around 23% of their assets to private markets, advisors currently allocate less than 5%.1 

Considering that almost 90% of companies with a revenue of over $100M are private, financial advisors and their clients are missing large portion of the investable economy. As such, private market investments represent an attractive portfolio opportunity for advisors looking to differentiate their practices, strengthen their competitive advantage, and offer their high net worth (HNW) clients a more sophisticated approach to building their portfolios and managing their wealth.

Understanding Private Market Investments Is Key for Advisors

To capture and maximize the private market investment opportunity, Advisors must have a high level of confidence explaining these investments to their clients. This requires understanding how private market investments work as well as the advantages, and risks, they bring to their HNW clients’ investment strategies and portfolios.

When strategically allocated, private market investments have the potential to improve a portfolio’s risk-adjusted returns through higher income, more capital appreciation, or lower volatility. Hesitant about illiquidity, many advisors still aren’t allocated. But it’s important to understand that illiquidity and risk are not one in the same. 

Gradually, advisors are beginning to realize that they can match the liquidity of an asset within a structure and still meet their clients’ liquidity needs with open-ended funds. What’s more, private investments can be less risky than public investments. When it comes to constructing a portfolio, the Advisor who wins more HNW clients take a sophisticated approach that considers liquidity and illiquidity preferences, capital appreciation and income returns, volatility, as well as diversification. Asset allocation and private investments play a significant role in this sophisticated Total Portfolio Approach.

The Many Advantages of Private Market Investments

Advisors who have their clients only invested in stocks, bonds, and publicly traded real estate are limiting their investment opportunities. For Advisors seeking to build relationships with HNW clients, the path to success is through becoming knowledgeable and confident about introducing private market investments. For HNW clients seeking a growth-oriented portfolio, private market investments work very well to achieve that end. For clients who want their portfolios to generate a higher income over time, they may see better results from private credit, equity, infrastructure, and real estate than they would from public investments.

Private investments present a wide range of potential benefits that appeal to HNW clients, including:

Managing Volatility

Portfolios that consist primarily of public stocks and public bonds have shown to be more vulnerable to market volatility, particular during times of economic uncertainty or upheaval. Private market investments help diversify portfolios, spreading risk across a broader range of assets and providing more stability.

Higher Returns

Private market investments have the potential to outperform conventional assets and traditional investments, boosting portfolio yields. Many private market investments2 have also historically offered the potential for higher long-term returns compared to traditional assets.

Risk Management

Due to the broad range of assets, private market investments provide the potential for more sophisticated risk management strategies that enable HNW clients to navigate volatile markets and continue to generate returns during times of economic uncertainty.

Inflation Mitigation

As concerns around inflation persist, investors are increasingly interested in assets like commodities and infrastructure than can actually appreciate during times of inflation.

Portfolio Resilience

Integrating private market investments into investment strategies can potentially reduce portfolio volatility and improve risk-adjusted returns. This advantage of this diversification particularly comes into play when the market is under stress.

Investing in Innovation

Many HNW clients are drawn to the idea of investing in innovative and emerging industries and companies. Private market investments allow Advisors to offer clients the opportunity to get in on the ground floor and capture significant value as these companies grow.

Greater Accessibility

Private market investments used to be available exclusively to the ultra-wealthy. New digital platforms and fund structures are making private market investments and assets more accessible and available to a broader range of clients.

Making Private Market Investments Part of Your Total Portfolio Approach

Given the significant advantage of private market investments, the question becomes: why aren’t more advisors including private investments in their portfolio construction? Private market investments often require more complex strategies and structures than traditional assets, which in turn requires a deeper level of due diligence and understanding on the part of the advisor — and the client. 

What’s more, Advisors have not had access to the tools and technology they need to easily construct portfolios with asset allocation that includes private investment. Add to that, a portfolio approach that encompasses private market investments requires highly customized and curated solutions, along with an exceptional level of service and multiple meetings with clients. Many advisors simply don’t have the time or resources for this level of client engagement.

At Sandro Wealth Management, we’re empowering Advisors to bring private market investments to their HNW client’s wealth management and investment strategies, with the expertise, support, education, and technology they need to capture these investment opportunities. Here’s how we help you differentiate your practice, strengthen your competitive position, and increase your right win HNW clients with private market investments.

• Our strategic asset allocation and private market investments experts share their wealth of knowledge to educate you and your team on private investments, elevating your comfort level and understanding.

• As an extension of your team, we meet with you and your clients to identify their goals, needs, values, and preferences, and to increase their understanding of private market investments and their advantages.

• Our team continues to consult with you and your clients across multiple meetings to build trust and confidence in your private market investment capabilities.

• We help you brand and market your practice as uniquely qualified in private investment strategies — a clear and strong competitive differentiator.

• As new asset classes emerge, we continue conducting research and keep you informed of new opportunities for your clients.

Start Capturing the Private Market Investments Opportunity 

Contact Sandro Wealth Management to discuss strategies for integrating private investments in your practice to increase your right to win HNW clients.

1. “A Study of Allocations to Alternative Investments by Institutions and Financial Advisors.” Nielson, Darby et al. Fidelity Institutional Insights. 2023.

2. “Asset Allocation with Private Markets.” Solotar, Joan. Blackstone. March 21, 2025.

Disclosures:

Sandro Wealth Management, LLC (“Sandro Wealth”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Sandro Wealth and its representatives are properly licensed or exempt from licensure.

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

Diversification does not ensure a profit or guarantee against loss. Past performance shown is not indicative of future results, which could differ substantially.

Investing in private funds involves a risk of loss that each existing and prospective investor should understand and be willing to bear. Existing and prospective investors are reminded to read fully and carefully understand these risks as outlined in Offering Documents and to discuss these risks with the Advisor.

No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. All investments include a risk of loss that clients should be prepared to bear. The principal risks of Sandro Wealth Management LLC strategies are disclosed in the publicly available Form ADV Part 2A