SEC Division of Investment Management staff letter: DALBAR, Inc.

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RESPONSE OF 1HE OFFICE OF CmEF COUNSEL
DIVISION OF INVESTMENT MANAGEMENT
Your letter dated March 20, 1998 requests assurance that we would not recommend enforcement action to the Commission under Section 206(4). of the Investment Advisers Act of 1940 ("Advisers Act") and Rule 206(4)-1(a)(1) thereunder if, as descnbed in your letter, DALBAR, Inc. ("DALBAR"), any investment adviser, or any associated person of an adviser, uses certain numerical ratings created by DAIBAR in investment adviser advertisements. FACTS DALBAR is a research finn that conducts survey research regarding financial institutions and, based on the survey findings, issues ratings of these institutions. DALBAR has. conducted a survey to measure the effectiveness of services rendered by investment advisers 1/ and/or their investment advisory representatives ("IARs-). 2/ You state that DALBAR intends to conduct subsequent surveys on a quarterly basis using substantially identical questionnaires; however, an adviser or JAR will be permitted to participate and be rated only once a year. 3/ ) You represent that DALBAR will not be affiliated with any adviser or JAR participating in the surveys. You state that DALBAR will solicit advisers and IARs to participate in a survey for a $500 fee, paid in advance, per participating IAR, or if a rating is sought ònly for an adviser, per adViser. M You represent that to participate in DALBAR's survey, an adviser and any participating JAR must have: (1) at least five years of experience as a financial adviser; (2) a minimum of 100 clients from whom a fee or commission was earned within the prior 12 months, or at least $15 million in client assets under management; and' (3) no record of any regulatOry sanctions imposed within the past 1/ You state that DALBAR expects that most of the investmeIit advisers surveyed will be regiStered with the Commission. . , 2/ The term "investment ~dvisoryrepresentatives" refers to those natural persons employed by investment advisers who render investment advisory services to an adviser's clients. 'J/ You state that the description of the DALBAR program applies to activities that already have been conducted as well as activities to be conducted in the future. The no-action assurances provided in this letter, however, apply only to activities relating to the DALBAR program that take place in the future in accordance with the facts and representations in your letter. ' 1/ As applicable, the discussion in this letter regarding participating IARs also applies to participating Advisers that have no IARs who are being rated. Effective November 4, 2022, This Letter is Withdrawn. Please consult the following web page for more information: https://www.sec.gov/divisions/investment/im-modified-withdrawn-staff-statements