Nearly three in four affluent investors now use artificial intelligence to help make investment decisions, according to a recent HSBC survey, yet Cerulli projects the average advisory fee on a $10 million client to be 66 basis points in 2026. The math is simple. Software can rebalance an index portfolio for a fraction of what an advisor charges. If your only value to clients is a portfolio of index funds, you are competing with software on price, and that is likely going to create a melting iceberg that is not good for your business.
The good news is that the same HSBC survey found that investors still rank the judgment of an advisor ahead of AI, three to one. What I believe they are paying for has changed: access to private investments and the relationships it takes to get in.
Advisors know this; nine in 10 advisors allocate to alternatives, according to CAIS and Mercer. But the average advisor allocation sits at roughly 5%, compared to 25% for institutions, and Fidelity’s allocation gap study names limited manager access, fees, liquidity constraints and high minimums as the causes.
The data matches what I see across the advisors we work with around the world. The appetite is there. The access is not.
Professional sports is the example I cite most often because the challenge stated by advisors rarely changes. At a recent meeting in our Houston office, I discussed sports franchise ownership and heard a typical response: “My clients cannot buy a team; ownership is for the ultra-rich.” That objection was accurate until 2019, when Major League Baseball became the first major U.S. sports league to admit institutional funds as minority owners, followed by the NBA and NHL in 2021 and the NFL in 2024. Today, an advisor’s qualified clients can own a diversified pool of minority stakes across all four leagues, if they have the right partner. That access matters because of what the asset can do in a portfolio. Public market correlations generally rise during market stress, as we saw in 2022, when the S&P 500 fell 18.1%, and the Bloomberg U.S. Aggregate Bond Index fell 13%. Yet, according to Standard Chartered, between 2007 and 2024, U.S. sports franchise values showed a correlation of approximately -0.01 to global equities.
Access to private investments exists. The harder question is what a firm means when it says the word, because the meaning varies. Access can mean a firm secured an allocation, negotiated the terms and built a vehicle its investors could hold. Access can also mean a firm listed a fund and added a fee.
Here is what the first kind looks like. Earlier in 2026, we took direct positions in two private companies: one builds satellites on an assembly line, a model Henry Ford made famous, and the other ships self-contained data centers to places with no grid. Neither opportunity was broadly available to individual investors. We invested our own capital alongside our investors and collectively were the largest allocator to the funds. An advisor should ask any firm claiming access, mine included, what kind it offers.
Before committing a client’s capital through any firm claiming access, ask five questions:
1. How much of your own capital is in this investment?
2. How did you get the allocation, and did you negotiate the terms or accept them?
3. How did you structure this for the client? What are you giving them that they could not secure on their own?
4. What is the total cost after every layer of fees? When and on what terms can my client withdraw, and where do each of those appear in the governing documents?
5. Did this investment come out of a thesis you had before the opportunity appeared, or did the opportunity just show up on your doorstep?
Allocations to outstanding investments are won through relationships, and terms are negotiated only when there is size and scale. The advisor’s job is to choose a partner that can accomplish both and to verify it. Ask those five questions of every firm offering that access, before the first dollar is committed.
The world of private assets is full of opportunities that were never available to many investors prior to the recent rule changes. Embrace the benefits they can bring to your client’s portfolios and enjoy the benefits they can manifest in your business.