SEC: Proposal would boost net-worth levels for charging clients performance fees
The SEC proposed a rule that would raise the net-worth threshold at which advisers can charge performance-based fees…
The SEC proposed a rule that would raise the net-worth threshold at which advisers can charge performance-based fees — a measure opposed by small hedge funds, private-equity firms and some registered investment advisers. The SEC proposal would require “qualified clients” to have $1 million invested with the adviser (currently $750,000) or a total net worth of at least $2 million (currently $1.5 million) before the adviser could charge a performance-based fee. The SEC also proposed that the value of an investor’s primary home be excluded from the net-worth calculation. If passed, the home value exclusion would likely keep some wealthy individuals out of hedge funds or other private-investment vehicles. Comments on the proposal are due July 11. For rule proposal, click here. For full story, see Pay-for-performance change by SEC could cost advisers.
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