Capital Preferences Releases Landmark White Paper Quantifying $6.9 Trillion Shortfall in Private Market Allocations

Study finds 30% investor churn tied to product misalignment and calls for new
behavioral-science standards in wealth management

BERKELEY, Calif., Nov. 20, 2025 /PRNewswire/ -- Capital Preferences, a global wealthtech and decision-science firm that helps financial institutions understand clients and prospects through advanced preference analysis, today released a major white paper identifying a $6.9 trillion shortfall in private-market allocations among U.S. accredited investors.

The report, titled The Client Alignment Challenge: A $6.9 trillion Private Markets Advice Gap, finds that the greatest barrier to private-market adoption is not access or product design but the industry's limited insight into how investors weigh risk, reward and liquidity. This shortfall in behavioral understanding creates a gap in advice, the divide between what clients could invest in private markets and what they actually do.

"Private markets represent one of the most important growth frontiers and client service opportunities in modern investing, yet the industry continues to treat client discovery as an unengaging, tick-the-box exercise instead of a means to meet more client needs," said Bernard Del Rey, Founder and Chief Executive Officer of Capital Preferences. "To serve clients responsibly and capture the full potential of private-market adoption, advisors don't need more generic education; they need a precise way to understand how each client weighs risk, reward and liquidity. Without that foundation, the trust, retention and growth of private investing will suffer."

The findings come as interest in private-market investments continues to accelerate, with new regulations, product innovation and advisor awareness driving interest but inconsistent adoption across the wealth management and retirement industries.

Growing Allocations Requires Systematic Client Engagement

The study draws on proprietary research from Professor Shachar Kariv, Ph.D., two-time chair of the highly acclaimed Economics Department at the University of California, Berkeley and co-founder of Capital Preferences. Using a pioneering methodology known as Revealed Preferences, the firm creates new data that explains how investors fit with private-market investment options based on how they make real-world decisions when faced with trade-offs between liquidity and return.

Across 1,532 investors – both accredited and non-accredited – the results revealed wide differences in how individuals approach illiquidity risk, even among those who are the same age and have similar levels of wealth. In other words, demographics alone, the study found, do not predict the optimal private-markets allocation size or horizon, who will stay invested in private markets or who will exit early.

Notably, the study found that 30% of investors who previously held private-market assets have since exited them – a trend explained by misalignment between their investments and behavioral comfort zone for private investing.

Meanwhile, it also found that 82% of investors could hold some level of private-market allocation. Yet because most firms rely on static questionnaires and advisor intuition rather than behavioral data, it is difficult to imagine the wealth industry reaching that figure without advisors rethinking the methods for how they personalize clients' private-market allocations.

Decision Science and the Future of Advice

Founded ten years ago, Capital Preferences applies decision science to wealth management through interactive technology that measures how clients solve difficult investing trade-offs. Its proprietary platform uses gamified decision activities to capture each client's Economic Fingerprint® – a multidimensional view of how they approach goals, risk, private markets, values, retirement income, tax and service preferences, among others.

The firm's deterministic economic and AI models translate these behaviors into credible data to personalize each client's portfolio, improve compliance and strengthen relationships within households and across generations. Capital Preferences partners with leading RIAs, broker-dealers, custodians and asset managers worldwide. It was recently approved as an enterprise Salesforce provider.

"Our mission is to help advisors grow by exploring their clients' decision making. It is the safest and proven way to meet more of their needs and personalize portfolios," Del Rey said. "When you see and understand how clients solve trade-offs, you have the clarity to match them to the right opportunities and prevent the kind of churn this study exposes."

The Private Markets Gap

The white paper calculates that closing the behavioral-alignment gap could increase accredited investors' private-market allocations from today's average of 5% to an average of 17% – with some allocations in low single digits and others as high as 40% depending on the client's comfort zone. That shift represents roughly $6.9 trillion in additional assets that could flow into the category if advice firms align offerings with evidence of what clients are comfortable with.

"Understanding how each investor resolves trade-offs is central to economics and should be central to personalized portfolios and financial advice," Kariv said. "Behavioral finance describes patterns after they occur. Decision science allows us to anticipate them and respond by designing better solutions. When clients are given a structured, interactive experience that mirrors real decision making, they learn, gain agency and are far more confident in their plan and recommended portfolio changes. That dynamic is what will drive scalable and sustainable participation in private markets. Compliance will be happy as well."

A Playbook for Firms and Advisors

The white paper outlines a Private Markets Playbook for both advisors and asset managers:

• Embed behavioral diagnostics into the client-discovery process to identify who is suited for private markets and who is not.
• Tailor product structures to align with investors' liquidity-return comfort zones rather than one-size-fits-all allocations.
• Integrate decision-science data into CRM, AI and portfolio systems to track satisfaction and reduce misalignment risk over time.
• Educate clients interactively, allowing them to experience trade-offs firsthand and build confidence before investing.

About Capital Preferences

Capital Preferences is a global personalization-technology company that helps financial institutions understand and serve their clients through the science of decision making. The firm's platform combines behavioral economics, data science and deterministic AI to capture how clients make real financial choices and translate that understanding into better advice, improved compliance and stronger relationships.

Founded by Bernard Del Rey and Professors Shachar Kariv and Dan Silverman, Capital Preferences partners with leading wealth- and asset-management enterprises, financial advisors and technology providers worldwide. The company's research and tools measure preferences across risk, private markets, goals, values, retirement income, tax and multiple generations, giving firms a systematic way to coach clients to success. To learn more, visit www.capitalpreferences.com.

Media Contact
Donald Cutler
Haven Tower Group
[email protected] / (424) 317-4864

SOURCE Capital Preferences