Asset managers outline calls to action for 'responsibly' broadening retail access to private markets
Experts argued that policymakers and regulators should consider actions to bolster the potential supply-side of the market, as well as ways to responsibly create demand.
The move is part of a World Economic Forum initiative, which gathered a group of industry experts from JP Morgan, BNY Mellon, AXA, Partners Group, Lazard, Apollo and others, to examine how individual investors could gain greater access «in a responsible way».
«Broadening access to private investments can have significant economic opportunities for suitable retail investors and for economies, when done responsibly,» said Jessica Douieb, managing director at JP Morgan.
In a white paper, the experts noted that all stakeholders, including financial advisers and investors, would need to rethink education and awareness-raising activities, given the higher levels of capital the sector requires, lower levels of liquidity, potential higher risks and higher fees.
FCA turns attention to private market valuations
For financial advisers, regulatory compliance training, product knowledge and other ethical considerations will be «key», the paper said, noting that «several shortcomings» have been identified in the current education practices.
«A focus on educating advisers to feel comfortable and confident in recommending private market products with compelling, engaging, evidence-based learning styles is important,» it said.
For fund managers, the paper called for firms to present information in a way that was understandable to a non-professional audience. For funds that have historically worked only with institutions, it said «this will be a steep learning curve».
The white paper also noted that to responsibly broaden access in an «inclusive» way, continued
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