For most people, it’s natural to assume that if something is exclusive to the wealthiest echelons of society, it must be better. Asset management firms looking to access trillions of “retail” investor dollars explicitly reference this exclusivity when marketing private equity offerings. But investors should be wary when fund marketers talk about “democratizing investing” or opening access to areas previously only available to the elite.

Reasons to be wary

Investing is already democratized. The SEC eliminated fixed trading commissions in 1975, and innovation has made investing in publicly traded stocks cheaper and easier ever since. Online trading platforms allow people of modest means to easily buy shares in almost any publicly traded company. The advent of cheap, passively managed mutua

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