The Investment Association (IA) has published a report setting out how firms offering private markets investments can draw in a wider range of investors.
The trade body said implementing the proposals would mean access is broadened responsibly, at scale and without weakening investor protection, within the ‘advised mass-affluent’ market.
The report is titled Private Markets Democratisation in the UK: Promise, Progress and Key Next Steps. It incorporated input from more than 20 asset managers, wealth managers and platforms, alongside IA consumer research.
The IA found the main barriers to private markets growth are now operational rather than regulatory.
Platform infrastructure, operational readiness, reporting and data standards, investor suitability and adviser confidence are the the ‘key challenges to overcome’.
The report sets out five ‘priority actions’ for private markets investment firms, regulators and policymakers.
These are: to build demand and adoption in the mass-affluent market, strengthen education, support greater flexibility, accelerate the build of distribution infrastructure, and inclusion in SIPPs.
Namita Kain, head of private markets at the IA, said: “Private markets can help channel long-term capital into growing businesses across the UK economy and help investors access a broader range of opportunities to support their long-term financial goals.
“While significant progress has been made in developing products and regulation, our research shows that the focus must now shift to reforming distribution, infrastructure and investor understanding.
“Broadening access successfully will require collaboration across the investment chain, from advisors to platforms, to ensure private markets are available to investors where they are suitable, supported by clear information and strong protections.”
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Nalaka De Silva, head of private markets solutions at Aberdeen Investments, added: “The debate around private markets often focuses on access, but access alone is not enough. If we want private markets to genuinely work for more savers, we need to make distribution work better too.
“That means platforms, asset managers, advisers and policymakers working together to ensure investors can access these assets through the channels that best suit their needs, whether that’s pensions, ISAs, or from a product perspective – investment trusts, hybrid solutions or newer fund structures such as LTAFs.”
