Last month, the Securities and Exchange Commission proposed adjusting the financial thresholds used to define a “qualified client” for purposes of the performance compensation rules under the U.S. Investment Advisers Act of 1940, generally raising the so-called net worth test from $1.5 million to $2 million and the so-called assets under management test from $750,000 to $1 million. For the most part, only a “qualified client” may be charged performance-based fees by SEC‑registered investment advisers, and the Dodd-Frank Act had directed the SEC to revisit these thresholds.
To discuss this issue in more detail, contact Jeffrey Wittenberg, Esq., today at 877-352-2010.