Key facts
- A 2020 SEC exemption has contributed to an $80 billion boom in private credit.
- The exemption allows for multiple share classes in investment products.
- Financial advisors have collected at least $796 million in fees.
- These fees are from selling private credit products to retail investors.
- The exemption has expanded access to private credit for individual investors.
A significant boom in the private credit sector, now valued at $80 billion, has been substantially fueled by a 2020 exemption granted by the Securities and Exchange Commission (SEC). This regulatory allowance permits the creation of multiple share classes within investment products. The availability of these varied share classes has directly enabled financial advisors to generate considerable income through fees earned from selling private credit products to retail investors. To date, these advisors have collected at least $796 million in fees related to these sales. The exemption has thus played a critical role in expanding access to private credit for individual investors and has been a key driver behind the sector's rapid expansion.