Wealth advisers across the country are fielding urgent calls from clients about their private-credit holdings as the asset class faces its first major crisis. Financial adviser Dick Pfister recently hosted a dinner in New York for 30 high-net-worth clients where private credit dominated the conversation. The discussion centered on adviser fees, fund returns, and the surge in client redemptions.

A wave of withdrawal requests has prompted Wall Street firms to limit redemptions from private-credit funds, marking a critical stress test for an asset class that has exploded in popularity among wealthy investors. The restrictions signal growing concerns about liquidity and valuation stability in the private-credit market. Advisers report clients are increasingly nervous about their exposure to the sector.

This turmoil represents a turning point for private credit, which has grown rapidly in recent years as investors chased higher yields. The current redemption pressures and withdrawal limits could reshape how the wealthy approach this investment category. For now, advisers are scrambling to address client concerns while navigating an uncertain market environment.