The news: Last week, Charles Schwab announced that it will acquire Forge Global for $660 million. Forge is a platform that lets retail investors buy and sell shares in private companies. It has facilitated more than $17 billion in private share transactions since 2014 and gives investors access to shares in companies like OpenAI and Anthropic, SpaceX, and defense startup Anduril.

Why it’s worth watching: Schwab is using its distribution to dive into private markets for retail investors. It plans to offer Forge investments to its ultra-high-net-worth customers and later expand it to high-net-worth investors. Schwab has 46 million client accounts and $11.6 trillion in client assets, making the addressable market for private shares within its own client base enormous.

As the Great Wealth Transfer accelerates and these client accounts and assets transfer to younger consumers, Schwab is future-proofing its business that’s built on traditional brokerage, banking, and financial advisory services. As we noted in our September 2024 report, Winning the Great Wealth Transfer in Wealth Management, $106 trillion in wealth will move to US heirs by 2048, and those investors are increasingly interested in alternative assets. Deloitte estimates that retail investors will allocate $2.4 trillion in the US to private capital by 2030.

Our take: Alternative assets are going mainstream for retail investors. What was once the domain of institutional investors and very wealthy individuals is trickling down to the rest of the population. On the heels of demand by younger retail investors for alternative assets, startups have sprung up that enable access, while fintechs like SoFi and Robinhood have done the same.

Legacy financial services firms’ puts alternative assets on step closer to the mainstream. But the impact for retail investors remains to be seen. Companies that offer access to private shares have run into legal and financial trouble before, and the SEC has strict guidelines for who can invest in unregistered securities. Schwab is wise to tread carefully by limiting investments in private shares to the wealthiest investors to start.