Private market investments have become increasingly accessible to wealth management clients, but the operational machinery to support them lags behind. According to Mat Dellorso, managing director of SEI Access, the industry has made significant strides in opening the door to alternatives, yet the back-office and reporting frameworks remain underdeveloped. SEI, which provides both investment and administrative services for alternatives, argues that simply offering these products is insufficient.
“Private markets cannot simply be ‘made available,’” Dellorso said. “They have to be integrated into the way advisors plan, allocate, communicate, and report for clients.” This integration is the next frontier, as advisors grapple with valuation, liquidity, tax reporting, and portfolio modeling once an alternative sits in a client's account.
The gap between access and infrastructure is stark. While subscription processes have moved online and custodial connectivity has improved, the focus has been on getting investors in, not on managing the ongoing lifecycle. Dellorso notes that the industry has “generally underestimated how much infrastructure is required to bring private markets to a broader wealth audience.” The result is that advisors often stitch together multiple systems—marketplaces, data providers, custodians, and reporting tools—to get a complete picture.
This fragmentation becomes evident in routine tasks. A statement may be difficult to reconcile, or an advisor may need extra time to answer a client question. Over time, these small gaps erode client confidence. Dellorso emphasizes that private investments cannot be treated as a separate sleeve; they must work within the same planning and allocation processes used for public equities and fixed income. “For many clients, the next sources of alpha may not come from simply picking one more public equity or fixed income manager,” he said. “They may come from better tax management, more thoughtful asset location, and prudent exposure to private markets where appropriate.”
The operational burden is not just about convenience; it affects the quality of advice. Advisors who manually reconcile data from five or six systems are less able to explain an investment's role in the portfolio. Dellorso argues that better connectivity, not more stand-alone tools, is the solution. “If the advisor has to manually stitch together five or six different systems, it becomes harder to explain the investment, monitor it, and keep the client confident over time,” he said.
Technology, particularly artificial intelligence, is often touted as a fix, but Dellorso cautions that AI is only as good as the data it processes. Private markets have long suffered from inconsistent data formats and fragmented sources. AI can help sort and reconcile information, but “if the underlying data is incomplete, inconsistent, or poorly connected, AI can make bad information move faster and appear more confident than it should,” he warned. Data standards, governance, and system integration are prerequisites for AI to add value.
The push for better infrastructure comes as private market allocations hit record levels, driven by investor demand for diversification and yield. However, the operational challenges are not unique to SEI. A Nasdaq survey found that private markets and AI are top growth priorities for asset managers, but scale hurdles remain. Similarly, T. Rowe Price research shows that DC advisors are deploying AI and eyeing private credit, yet they face similar integration issues.
As more firms offer comparable access, the differentiator will be how well they support these holdings over time. Dellorso sees this as an opportunity for advisors to differentiate themselves by delivering a seamless client experience. “The opportunity is exciting because it gives more investors access to sources of diversification that historically were limited to institutions or very high-net-worth investors,” he said. “But access alone is not enough.”
In the end, the industry must invest in the plumbing—data standards, reporting systems, and integration—to make private markets a sustainable part of wealth management. Technology can accelerate processes, but it cannot mask underlying weaknesses. As Dellorso puts it, technology tends to expose the quality of the underlying infrastructure rather than hide it.
