The seven-year question few client portfolios can answer

Ask a room of advisers how much of a client’s portfolio can safely stay locked up for seven years, and the answers scatter. Some name a round number they have never tested. Others avoid the question by holding nothing at all.

Yet that single figure governs almost every private markets allocation decision that follows, from how much private credit a client can carry to whether a capital call lands at an awkward moment.

FinCap Platform has put the question at the centre of a new education programme for advisers. The firm launched a complimentary review of advisers’ private market holdings on 24 August, led by Ben Davis, head of portfolio and investment solutions, and paired it with a monthly webinar series and a run of educational luncheons.

The homework behind an allocation

Davis treats asset allocation as the harder half of private markets work, and the part advisers reach last.

“The larger an institution’s allocation to private markets, the more important it is to derive that allocation in a coherent way,” he says. “Given the diversity across private markets that generate outsize returns, this makes asset allocation all the more challenging.”

The review covers liquidity needs, gearing policy, peer and benchmark risk, fee and complexity budgets, along with the split a portfolio should hold between liquid and illiquid alternatives.

Each of those carries a live decision. A liquidity budget sets how much capital can stay locked away and for how long, which shapes how a client funds a pension drawdown, a tax bill or an unplanned settlement. Gearing policy asks where the borrowing lives: inside the underlying deals, at fund level or in subscription lines that flatter early returns.

Fee and complexity budgets force a whole-of-portfolio view of cost and administrative load, instead of judging each fund against its own headline number.

Davis credits better inputs for making that work possible. He points to “the emergence of robust and trustworthy data, along with the development of more sophisticated analytical tools”, which he says has sharpened the industry’s understanding of the drivers of performance and risk factor exposure across private markets.

Where advisers are starting from

The starting point for private markets allocation is thinner than the marketing suggests. VanEck’s September 2025 adviser survey found roughly 40 per cent of advisers had made no private markets allocation at all, with a further 27 per cent allocating only opportunistically.

Administration explains part of the hesitation. Advisers report holding as much as 20 per cent of client allocations off platform to reach these assets, then rebuilding whole-of-wealth reporting by hand.

Christian Ryan, FinCap founder and executive chairman, argues the knowledge problem compounds the plumbing problem.

“Private markets are growing fast and so is investor curiosity. Yet misconceptions about access, liquidity and complexity continue to hold many back. Advisers are being asked more and more by clients about private markets, often without the resources to answer with confidence.”

A private credit veteran opens the series

The first webinar runs on 8 September, hosted by Ryan, with Andrew Lockhart, chief executive officer and managing partner of Metrics Credit Partners. Registrations are open to advisers. Metrics has grown into one of the country’s larger private credit managers across listed and unlisted vehicles.

That history makes Lockhart a useful first guest for advisers whose clients already hold the asset class without understanding how it works.

“We wanted the first conversation to come from someone who has lived through the growth of this asset class, not just observed it from the outside,” Ryan says.

What education cannot fix

Any portfolio review works only as well as the numbers feeding it, and the regulator has spent 2026 questioning those numbers. ASIC surveyed 22 managers and 52 funds holding about $76 billion between late March and mid-May.

In June it warned that weaker borrower conditions raise the risk that reported valuations do not fully reflect underlying economic conditions, particularly in property development.

The regulator also found managers applying different definitions of arrears, impairment and loan amendments, which makes two funds difficult to compare even when both look healthy. Its ten private credit principles, published as REP 823, followed the surveillance work in REP 820.

Advisers taking up a review, from FinCap or anyone else, should ask which valuation and arrears definitions the underlying funds apply before lining them up side by side.

Liquidity budgets deserve the same scepticism. ASIC flagged redemption pressure building in global feeder funds and liquidity buffers tightening, and a budget written in a calm market is the one that gets tested in a hard one.

CPD time has to earn its place

Advisers must complete at least 40 hours of CPD each year, so an education series competes with everything else on the calendar. The real return on this one will show up in the questions advisers start putting to managers, rather than in attendance numbers.

The next round of client conversations will favour the adviser who can state, without hesitating, how much illiquidity a household can carry and for how long.

Getting that number right is where private markets allocation work should begin, settled well before the next deal comes knocking.