Inking a deal for private markets platform Forge was apparently just too Schwabvious to ignore.

The massive retail brokerage Charles Schwab says the $660 million deal, announced last week, will help improve liquidity and transparency in private market investments. The brokerage firm that pioneered discount stock-trading will soon be offering shares in some of the world’s most dazzling unicorns — like Anthropic, OpenAI and SpaceX — all available to retail investors, advisors and institutions.

“We’ve created a whole bunch of ways for clients to manage and create diversified portfolios,” Schwab CEO Rick Wurster told Advisor Upside at the Schwab Impact conference in Denver last week. “It’s an underwritten story about how much the industry has innovated around those topics. It may not be as glamorous as prediction markets and sports gambling, but I think a lot more impactful.”

Forging Ahead

Forge already has 636,000 registered users, and more than 4,700 companies are available on the platform. However, fees can run from 2% to 4% of the total transaction size, with investment minimums starting at $5,000, according to Forge’s website. As public markets continue their impressive bull run, advisors are clamoring to ensure clients are as diversified as possible, said Jon Beatty, head of advisor services at Charles Schwab.

“Companies are staying private longer, and so the opportunity is there [for advisors] to participate in those organizations, to express their views of the economy, and the investment theses that they develop for their clients,” he told Advisor Upside at the conference.

Private investing may become a staple in client portfolios, not to mention a gold mine for asset managers and brokerages alike. By 2030, retail investors’ allocations to private capital in the US could skyrocket to $2.4 trillion, according to a recent report by Deloitte. Just last month, Morgan Stanley agreed to buy EquityZen, a company that offers similar private-stock investments. They’re hardly alone:

• Goldman Sachs acquired the venture capital firm Industry Ventures last month in a move CEO David Solomon said would strengthen its relationships with ultra-high-net-worth clients.
• BlackRock snagged New York-based private-credit manager HPS Investment Partners in an almost $12 billion buyout in December.

Private or Not. The Forge deal notwithstanding, Schwab’s recent growth has been staggering, with much of it being fueled by the company’s wealth business. “We’re the leading custodian; there’s not really a close second,” Wurster said, adding that the segment grew 40% year over year through the third quarter. “What we can bring to the advisors is unmatched on the wealth side, and that has been a source of significant growth for us.”

As millions of Americans approach retirement, they’re starting to take a line right out of Star Wars: “I’ve got a bad feeling about this.”

Retirement is meant to be relaxing, but planning for it is causing growing anxiety. Only 6 in 10 Americans feel financially secure about retirement, according to Allspring’s latest study — a 15% drop from 2023. Women, near-retirees, and younger retirees reported the largest declines, underscoring the need for more personalized planning and financial education.

Those with financial advisors are generally wealthier, healthier and more informed. But for those relying solely on workplace retirement programs or Social Security, planning is trickier. “There is certainly education,” said Nate Miles, head of global client strategy at Allspring. “The question is how much of it is consumed and whether it’s personalized enough to help individuals make optimal decisions.”

Late for Class

A major problem is that many Americans just don’t know what they don’t know:

• Most near-retirees are unaware that delaying Social Security from age 62 to 70 can boost monthly benefits by nearly 80%.
• That’s troubling since Social Security accounts for about 40% of retirees’ income.

“Social Security has been, and will continue to be, a key pillar of retirement income,” Miles told Advisor Upside. “At the same time, good planning over a 30- to 40-year working career should help lessen the significance of the role it plays for future retirees.”

Tax strategy is another weak spot: Only one in five retirees use a tax-efficient withdrawal plan, and about the same have no strategy. While taxes are automatic for W-2 employees, retirees face multiple income streams and must decide how to withdraw funds efficiently. Many lack the knowledge to minimize taxes, making this an area where advisors can provide meaningful value, Miles said.

Off Target. One thing Americans do know is that flexibility matters. Some 84% of near-retirees prefer investment options beyond target-date funds, which are suitable for younger investors, but too simplistic for those nearing the end of their careers. To meet evolving needs, Allspring said defined contribution plans should offer more income-focused options, including core active bond strategies.

Billionaires don’t just want to bet on the Stanley Cup. They want to own the New York Rangers.

A new JPMorgan survey of 111 billionaire families found that 20% now own controlling stakes in sports teams, up from just 6% in 2022. Over a third are investing in stadiums and franchises, ranking sports above other luxury assets, like fine art and classic cars. Once a passion project for the ultra-rich, sports ownership is becoming a more mainstream portfolio holding. “Sports have gone from being a wealthy individual’s hobby to a really serious business,” one billionaire said in the survey. “We’re overallocated to sports, but it’s been phenomenal.”

Are You Ready for Some Football?

Major sporting events like the Super Bowl and FIFA World Cup dominate global viewership. With reliable revenue and global reach, it’s no wonder billionaire families want in. This year alone has seen massive deals:

• The Koch family acquired a minority stake in the New York Giants, valuing the team at more than $10 billion.
• Guggenheim Partners CEO Mark Walter completed his $10 billion purchase of a majority stake in the Los Angeles Lakers.
• For a comparatively modest $600 million, the Miller family, longtime former owners of the Utah Jazz, bought controlling interest in RSL Football Holdings, operator of Real Salt Lake, Utah Royals FC and related stadium assets.

“This asset class has transcended fandom,” JPMorgan said in the report. “For many principals, ownership is both a strategic and emotional endeavor.”

Good News, Sports Fans. While direct ownership remains limited to accredited investors, ordinary fans can still get in the game. Madison Square Garden Sports and Manchester United are both publicly traded on the NYSE, while the company that owns the Atlanta Braves is listed on the Nasdaq. Private-equity giants Apollo and Ares Management are also developing sports investment funds to give retail investors access to the booming arena of sports ownership.