Rachleff: Retail private funds are 'high-priced junk' amid Schwab Forge push

On July 21, Charles Schwab CEO Rick Wurster told analysts that the firm has closed its acquisition of Forge, a secondary market for pre-IPO shares, and is working to bring Forge's platform to Schwab clients. Wurster said Schwab is positioned to become a 'premier destination' for private-market investing, RIABiz reported.

A day later, Wealthfront co-founder and executive chairman Andy Rachleff published a blog post arguing that private funds aimed at retail investors are 'essentially high-priced junk,' according to RIABiz. The post did not name Schwab or Forge, but Rachleff, a private-equity insider, said leading PE firms and hedge funds funnel the best investments to institutions.

RIABiz noted that Wealthfront recently completed an IPO at $14 per share, with about 75% of its stock still privately held and trading below the offering price.

The exchange highlights the widening divide over democratizing private markets. Schwab and other large custodians are opening access, while critics like Rachleff argue the economics are skewed against smaller investors. For allocators, the dispute is a reminder to weigh fee transparency and manager alignment when evaluating private-market offerings.

If Schwab scales its Forge-powered offering, retail participation in private markets could expand materially, with unclear effects on institutional deal flow and pricing. The source does not provide a timeline.

Rachleff's critique carries the weight of an insider, but RIABiz points out that his own firm's private shares are underwater following its IPO. That context does not weaken his argument, but it illustrates the illiquidity risk even prominent private companies face.

For wealth managers, the episode suggests the retail private-markets push is still in its infancy. Schwab's ability to deliver institutional-grade access at scale remains an open question.

Watch for Schwab to disclose rollout details for the Forge integration, and for rivals to respond. The source offers no timeline.