Private Market Tax Education Innovation: How Advisor Empowerment Fuels AUM Growth and Client Retention

The private market landscape has become a cornerstone of modern wealth management, offering high-net-worth clients diversification, inflation hedging, and access to unique opportunities. Yet, as these markets grow in complexity, the role of financial advisors has evolved beyond mere portfolio management. Advisor empowerment through innovative tax education tools is now a critical driver of assets under management (AUM) growth and client retention. This article examines how tailored educational resources and technological advancements are reshaping the advisor-client dynamic, supported by data from industry leaders like McKinsey, Cerulli Associates, and BlackRock.

The Rise of Private Markets and Advisor Challenges

Private market assets under management (AUM) reached $22 trillion in 2024, driven by alternative capital sources such as separately managed accounts and co‑investments, according to McKinsey's reportMcKinsey's report. However, advisors face significant hurdles: a Cerulli study found that 44% cite client education as a barrier to adopting private market strategiesCerulli study. Complex tax implications, liquidity constraints, and regulatory uncertainties often deter clients from committing to these investments. For instance, according to an Empower surveyEmpower survey, 66% of advisors stated that clearer ERISA guidance would increase their willingness to recommend private market investments in retirement plans.

Tax Education as a Catalyst for Advisor Empowerment

Innovative tools are bridging this knowledge gap. Platforms like Apollo Allocation Pro (launched in 2025) enable advisors to design hybrid portfolios integrating private markets and traditional assets, simplifying tax-efficient strategies for clients, as Apollo announced in 2025Apollo announcement. Similarly, the TPCP® program equips advisors with expertise in lifecycle tax planning, from accumulation to estate strategiesTPCP program. These tools not only enhance advisors' technical capabilities but also build client trust through transparency.

For example, Russell research shows that 77% of clients express increased confidence when advisors communicate regularly and personallyRussell research. Tools that demystify concepts like Qualified Opportunity Zones (QOZs) or 1031 exchanges-such as the Smart 1031 Exchange Hub-allow advisors to present actionable, tax-optimized solutions, as Origin Investments explainsOrigin Investments. This empowerment translates directly into client retention: 81% of advisors agree that private market offerings differentiate their practices, while 66% believe these strategies improve AUM retention (Cerulli Associates).

Quantifying the Impact on AUM and Retention

The financial benefits of advisor empowerment are measurable. Private market AUM is projected to grow at twice the rate of public assets, reaching $65 trillion by 2032 in Bain & Company's projectionBain projection. Advisors leveraging tax education tools are better positioned to capture this growth. For instance, high-liquidity products like tender offer funds and business development companies (BDCs) have attracted $1–1.5 trillion in AUM since 2020, growing at 16% annually, according to BlackRock's outlookBlackRock insight. These structures, which mitigate traditional lock-up periods, are often promoted by advisors who use educational content to explain their advantagesEnrich article.

Client retention metrics further underscore the value of education. One analysis from Drake Software finds that a 5% increase in retention can boost profitability by 25–95%Drake Software. Advisors who prioritize tax education report higher client satisfaction: 94% of investors are more likely to refer an advisor they "highly trust," according to Dunham's findingsDunham research. This trust is cultivated through proactive communication and personalized planning, as covered by InvestmentNewsInvestmentNews coverage.

Challenges and the Path Forward

Despite progress, challenges persist. Liquidity remains a concern, with 33% of clients citing communication breakdowns as a reason for switching advisors, per reporting in the Thomson Reuters blogThomson Reuters blog. To address this, firms must invest in AI‑driven tools that provide real‑time tax scenario modeling and liquidity forecasts. Additionally, regulatory clarity-particularly for retirement plan integrations-is essential to unlock broader adoption (as noted in the Empower survey).

Industry coverage in FT Adviser highlights that private markets will grow rapidly, but regulatory complexity will persistFT Adviser article. Advisors who combine technical expertise with emotional intelligence-helping clients navigate audits or market volatility-will thrive, a point echoed in practitioner writing on the Tax Guy blogTax Guy blog.

Conclusion

Advisor empowerment through private market tax education is no longer optional-it is a strategic imperative. By adopting innovative tools and prioritizing client-centric communication, advisors can drive AUM growth, enhance retention, and navigate the evolving wealth management landscape. As the industry moves toward higher-liquidity products and personalized solutions, the advisors who lead will be those who treat education as both a service and a relationship-building tool.