Advisors should consider private equity for their clients because they provide returns at a time when many investors, despite the gains of the last decade, are behind in achieving retirement goals, the panelists said.
But advisors need to educate themselves on private equity so they can explain the products to clients in clear and simple terms, panelists said. “If the hassle factor outweighs the alpha factor, you’re going to have resistance,” warned Clayton Cheek, director of business development at Artivest.
However, it is important to overcome the potential resistance to private equity because the public markets no longer provide full exposure to the U.S. economy, Sheperdson said.
“On average, public companies are older and less growth oriented than private companies,” he said. “If you are looking to grow your practice over time, then I don’t think that you can avoid this asset class.”