Estate Planning Strategies for Financial Advisors in 2025

Cerity Partners' Strategic Move into Private Markets: A Game Changer for Wealth Advising

Update The Growing Interest in Private Markets The recent partnership between Cerity Partners and Nasdaq Private Market marks a pivotal moment in private equity investment strategies. With over 144 billion in client assets, Cerity's minority stake in Nasdaq's secondary market for private company equity aims to offer a comprehensive liquidity and financial planning experience as companies, like OpenAI and SpaceX, remain private longer than ever. This trend has significant implications for financial planners and wealth advisers focusing on high-net-worth clients who look for diverse investment opportunities and liquidity options. Why the Shift to Private Equity? The shift toward private equity and the declining trend in public companies is notable, with more firms launching and staying private. According to data from Pitchbook, while the number of public companies has declined, platforms such as Nasdaq Private Market, together with EquityZen, Forge Global, and Carta, have emerged to facilitate secondary sales of equity. The advantage these platforms offer is clear—access to previously hard-to-source investments obtained through tender outfits driven by companies needing to provide liquidity for their employees and stakeholders. Importance of Tailored Financial Planning The complexities surrounding liquidity events—situations where employees and investors look to cash out their equity—necessitate bespoke financial planning. This partnership between Cerity and Nasdaq aims to mitigate the administrative burdens experienced by finance and HR teams during these events. Not only will Cerity provide guidance on equity compensation and tax implications, but they are also expected to enhance the overall employee experience during these transitions, streamlining the advice offered in conjunction with liquidity events. Diversity of Investment Options Coming to High-NET-Worth Clients With Cerity's exclusive access to Nasdaq's liquidity programs, high-net-worth clients will gain entry to structured programs that may not be widely available through traditional markets. This growing access to high-growth private company investments underscores a significant innovation in how wealth managers can empower their clients. Furthermore, as more financial advisors seek to understand these alternative markets, they enhance their service offerings and bolster client retention rates. Potential Challenges for Advisors Despite the opportunities, many advisors remain hesitant to delve into the private markets due to perceived risks and the complexity associated with these investments. Discussions at the recent RIA Edge Private Markets conference highlighted concerns regarding opacity and the intricacies of managing equity stakes that may have no immediate liquidity. Financial planners must address these hesitations by improving their understanding, leveraging partnerships like Cerity’s, and providing transparent information to their clients. Looking Ahead: The Future of Private Market Investments As the landscape of investment continues to evolve, the collaboration between Cerity Partners and Nasdaq Private Market signifies a shift towards more integrated financial services that cater to complex client needs. This strategic move hints at larger trends, encouraging RIAs to adapt their practices to include robust strategies for private equity investments. As such partnerships become more prevalent, the financial advisory industry must stay ahead of these shifts to optimize client portfolios for both short-term and long-term success. The integration of sophisticated financial planning with investments in private equity paves the way for tailored strategies that can provide significant advantages to clients, especially those classified as ultra- and high-net-worth. For advisors aiming to retain and grow their clientele in this shifting market, understanding these partnerships is not just beneficial; it’s essential for future success.