Wealth advisers earned more than $2 billion in fees from private capital investments in 2024, according to a new analysis by the Financial Times, highlighting the growing financial incentive for advisors to steer clients toward illiquid assets such as private equity, venture capital, and private credit funds.
The figure, derived from disclosures by major wealth management firms and regulatory filings, represents a 35% increase from the $1.5 billion in private capital fees earned by advisers in 2023, driven by rising allocations to alternative investments amid persistent volatility in public markets and sustained demand for yield-generating strategies.
Private capital has become a cornerstone of portfolio construction for high-net-worth clients, and advisers are being compensated accordingly through complex fee structures that often include both asset-based and performance-linked components.
Financial Times, April 18, 2026
The analysis, which reviewed fee disclosures from the top 20 global wealth management platforms including UBS, Morgan Stanley, JPMorgan Chase, and Goldman Sachs Asset & Wealth Management, found that advisers typically receive between 0.75% and 1.5% annually in asset-based fees on private capital allocations, with additional carried interest or performance fees ranging from 5% to 20% of profits, depending on the fund structure and client tier.
In many cases, these fees are layered: clients pay a management fee to the private fund (often 1.5–2.0%), a separate platform or advisory fee to their wealth manager (0.5–1.0%), and sometimes an additional subscription or access fee for entry into exclusive fund offerings, creating a multi-tiered cost structure that can exceed 3% annually before any returns are realized.
While private capital can offer diversification and long-term return potential, the opacity of fee arrangements and the illiquidity of these investments raise concerns about whether clients fully understand the total cost burden, particularly when advisers may have conflicting incentives to recommend higher-fee products.
Financial Times, April 18, 2026
Regulatory scrutiny is intensifying. In the United States, the Securities and Exchange Commission (SEC) has proposed new rules requiring greater transparency in fee disclosures for alternative investments sold through broker-dealers and investment advisers, including a standardized format for presenting total annual costs and potential conflicts of interest. Similar initiatives are under review in the European Union under the Markets in Financial Instruments Directive II (MiFID II) review process.
Investors deserve to know exactly what they are paying for, especially when they are locking up capital for seven to ten years with limited ability to withdraw or assess performance in real time.
SEC Commissioner Caroline Crenshaw, speech at the Investment Adviser Association Conference, March 2026
Industry defenders argue that private capital allocations have delivered strong risk-adjusted returns over full market cycles, citing data from Preqin and Cambridge Associates showing that top-quartile private equity funds have outperformed public equities by an average of 4–6 percentage points annually over the past 15 years. They contend that the fees reflect the specialized expertise, due diligence, and access required to navigate these complex markets.
Nevertheless, the surge in adviser compensation from private capital has prompted internal debates at several major firms about fee fairness and client alignment. At least three wealth managers have begun piloting “fee-only” models for alternative investments, where advisers receive a flat annual retainer rather than asset-based fees, to reduce perceived conflicts of interest.
As of March 31, 2026, private capital assets under advisement by wealth management firms reached an estimated $1.8 trillion globally, up from $1.4 trillion at the end of 2023, according to data from Cerulli Associates. With average fees holding steady, the $2 billion threshold in annual adviser income from this segment is likely to be surpassed again in 2025 unless regulatory changes or shifts in client behavior alter the current trajectory.