Regulatory Alerts2017-08-08
Guidance Regarding Fees for Illiquid Investment Products
The Idaho Department of Finance issued this guidance to state-registered investment advisers regarding fee structures and disclosures for illiquid securities. The document warns that charging ongoing advisory fees for assets that cannot be actively managed may violate fiduciary duties and state laws prohibiting unreasonable fees. It highlights regulatory concerns from the SEC and FINRA regarding reverse churning, suitability, and the necessity of transparent conflict disclosures.
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