Advisers need to communicate that while upcoming account statements may look a bit different than before, the alternative investments in clients’ portfolios remain fundamentally unaffected
Apr 20, 2016 @ 12:01 am | By Clive Slovin | Investment News
While the Department of Labor’s newly unveiled fiduciary rule has dominated industry headlines in recent months, another fresh regulatory shift also has the potential to cause significant upheaval for countless advisers.
The Financial Industry Regulatory Authority Inc.’s Regulatory Notice 15-02 announced changes to NASD Rule 2340 and Finra Rule 2310. As a result of these changes, effective April 11, retail clients invested in direct participation programs — such as publicly registered business development companies and nontraded real estate investment trusts — will begin to see critical adjustments to their account statements this quarter.
These adjustments ostensibly will offer a greater level of pricing transparency and better reflect the fact that the fees for these investments typically are paid upfront. The planned changes have been in the works for well over a year.
The Blue Vault Summit could not have been more perfectly timed. This gathering of the Broker Dealer and Sponsor communities provided insightful and open discussion from several vantage points. These conversations are paramount, especially in a time of significant regulatory change.