The broker-dealers and nonlisted [real estate investment
trust] sponsors that are [Investment Program Association] members take exception to your shrill, misguided editorial, "
Too much of a good thing" (May 5). In recent years, IPA member firms have developed product structure innovations and delivered strong investment results to investors. While nonlisted REITs have returned $19 billion in equity to shareholders since the start of 2013, a number you omit, this is only one measure of investor value that our firms deliver.
The IPA's recent support for Regulation SR-FINRA-2014-006, the proposed regulation that would change investor account statements, shows that our members favor industry transparency.
Certainly it's regrettable that any broker-dealer exceeded concentration limits. But you write as though these infractions were recent. In fact, most happened before 2009. Five years ago. These violations simply aren't the industry norm. Broker-dealers selling nonlisted REITs monitor concentration in their clients' portfolios to stay within limits mandated by their firm and their state.
In speculating about the future, it's astonishing to us that your reporter and this editorial cite a single industry source illustrating your point of view. Balance doesn't seem to be part of your agenda.
Finally, your cartoon portraying clients as babies in a high chair being spoon-fed "nontraded REITs" by advisers insults both groups. We can only conclude it was intentional.
Kevin M. Hogan
President and chief executive
Investment Program Association
Background checks should be consistent
Your editorial, "
Require broker background checks" (April 21) is right on point — but to what standard (and who will pay for that search), and what can happen to that data (i.e., privacy considerations)? But this is only half the story. My question is, what do the regulators expect? One would argue, full disclosure and accurate disclosure, but compared to what?
Background checks need to happen and they need to happen in a uniform and consistent manner.
Further, any background and public database for registered representatives and investment adviser representatives are incomplete if the data do NOT include insurance agent licensing and mortgage licensing. The
Financial Industry Regulatory Authority Inc. should be offering its platform for insurance and mortgage licensing — across the country. This information, coupled with background checks and related disclosure, will be better information for a consumer, whether an individual or institution, to evaluate the people they are entrusting their financial lives with, and exactly who they are and how they will be compensated.
Peter Mafteiu
Principal
Sound Compliance Services
Gig Harbor, Wash.
