Clients have long watched from behind the velvet rope as Wall Street’s VIPs got access to private funds. Now they’re finding themselves on the guest lists.

Semiliquid funds offer access to illiquid assets with the potential for high returns without requiring investors to lock up their cash for years (typically with quarterly withdrawals that are capped at 5% of the fund’s value). Investors seem to think it’s worth it: These funds are nearing $600 billion in net assets as of the end of March, more than double the amount at the end of 2022, according to a new report from Morningstar. But what’s got investors interested in semiliquid funds has changed dramatically in just around 12 months.

“Last year when we were doing this, it was really a private credit story,” Jason Kephart, senior principal of multi-asset strategy ratings at Morningstar, said during the research firm’s investment conference last week. “But now we’re starting to see a lot more interest in private equity and venture capital.”

VC, PE Take Over

While private credit funds drove much of the recent growth, investors took a step back this year as worries that artificial intelligence will disrupt software companies spurred redemption requests across private markets. Instead, they’ve turned their attention to semiliquid venture capital funds due to excitement around SpaceX, Anthropic and OpenAI:

• The VC category garnered net inflows of roughly $8 billion over the 12 months ending March 2026, a significant jump from almost zero during the 12 months ending March 2024, according to the report.
• Meanwhile, net inflows for the private equity category increased to around $14.5 billion from $6 billion two years ago.

Anthropic and OpenAI are expected to follow SpaceX’s successful debut with IPOs of their own as early as this fall. Jack Shannon, principal of equity strategies at Morningstar, said he’ll be watching for “what’s the next thing that these venture funds are going to try to sell people on” once all those companies are public.

“There are not that many household names once you get past those three, and these venture funds kind of need an anchor name to sell the product to people,” Shannon said. “Is this flow trend going to reverse? If I had to put my money on it, I would say it will definitely slow.”

Uneven Bars. Morningstar rated 19 semiliquid funds over the last year and only four earned a bronze (Apollo Diversified Credit, Blackstone Private Credit and Pimco Flexible Municipal Income) or silver (Pimco Flexible Credit Income) rating, which reflects the research firm’s view that “beating public market indexes is a high bar given high fees and cash balances.”

Wait, don’t click that suspicious link!

Financial fraud is hitting record highs and becoming a major problem for clients as cyber criminals become more sophisticated, according to a recent survey from the CFP Board. Nearly two thirds of Americans have encountered fraud or know someone who has in the past three years, and more than half expect themselves or someone close to them to be targeted in the next year. Losses are also at an all-time high, hitting $16 billion in 2025, up 25% from the prior year, according to the FTC. As fraud becomes more prevalent, helping prevent or respond to it can build stronger relationships between advisors and clients and keep their assets protected.

“There are important gaps in knowledge and preparedness that everyone needs to address,” said Kevin Roth, managing director of research at CFP Board, adding that the strategies will continue to evolve alongside new artificial intelligence tools.

Something Smells Phishy

Cryptocurrency and AI scams are causing some of the largest financial headaches. In 2025, Americans lost $7.2 billion to crypto investment scams and $893 million to AI-related scams. Vishing, where fraudsters use AI to clone voices and convince victims to transfer money, is a growing threat.

“Fraud is now more sophisticated and can involve more convincing impersonations than in the past,” said David Zuckerman, a CFP and founder of Zuckerman Capital Management. “A good rule of thumb is to never assume that someone reaching out to you is who they purport to be without independent verification,” he said, adding that confirming wire requests by phone is mandatory, as well as providing information on any third parties involved and the nature of the transaction.

The CFP Board report also found:

• Phishing or smishing (SMS text message scams) are the most common types of fraud, making up 62% of attempts.
• Imposter scams are also common, at 51%, while investment fraud, lottery scams and relationship scams made up around 20% of incidents.
• Just 37% of respondents said they felt confident in their ability to spot a scam.

It’s Not Just Grandma. Americans under 45 may be more confident than older generations in their ability to spot a scam, but 32% reported losing money to fraud, compared with 20% of their older counterparts. And it’s not small potatoes: More than half of those victimized in the past three years said they lost $500 or more.

According to the survey, a quarter of those who experienced fraud didn’t report it. “Most fraud victims face real, practical barriers after an incident,” said Roth. But victims shouldn’t just walk away. “That closes off any chance of recovering a loss and misses the opportunity to inform others about potential risk.”

Who wants to wait decades to retire?

We’ve heard about the FIRE movement (the aggressive savings strategy that stands for financial independence, retire early), but a growing number of clients are doing the exact opposite, extending breaks from work that can last several months or even a year. While that can be rejuvenating, advisors say clients should carefully consider the tradeoffs of so-called micro retirements: Disruption of peak earning years can mean health insurance headaches, loss of income and fewer years for investments to compound.

Bridget Borel, founder of Clairwell Financial Planning, works with military personnel, and said she’s accustomed to clients taking extended breaks before transitioning to civilian life. “If we stay work-centered for our entire careers, retirement can be jarring and leave people struggling with a sense of purpose,” she said.

What’s the Plan?

Advisors stress that career breaks require careful planning. It could take years to plan a micro-retirement longer than three months, Borel said, adding that health insurance and a strategy for re-entering the workforce are among the biggest considerations. “I want clients to plan for a significantly longer drop in income in case it takes longer than expected to return to work,” she said.

Also, clients on sabbatical could easily miss out on compounding interest in their retirement accounts, said Jeff Judge, managing partner at Chesapeake Financial Planners. “Micro-retirements can be one of the smarter things a young person does, or one of the most expensive,” he told Advisor Upside. “A dollar not invested in your 30s is the most expensive dollar you’ll ever skip.”

The appeal of a micro-retirement is clear:

• Some 65% of Americans, from boomers to Gen Z, believe a mini retirement will improve their quality of life, according to a 2025 HSBC survey.
• Gen Z wants to take the time to pursue their lifelong passion, millennials want to spend time with their family, Gen X wants unconstrained travel and boomers want to focus on their well being.

I Want to Break Free. Alvin Carlos, managing partner at District Capital Management, recalled a client who took a year off after spending more than a decade at the same company. “She was really good at her job, but she was tired, wanted a change and didn’t know exactly what path to take,” Carlos said. After taking time to unwind, the client pursued leadership coaching and eventually launched her own business. “Some end up loving the break and returning refreshed,” he said. “Others use it as a transition to a different path.”