Von Aldo

The Selling Away "Problem." The Trouble with Outside Investment Vehicles.

Our friend and long-time legal correspondent (and industry gadfly and proud of it, thank you very much) Bill Singer has an interesting blog that he posted on 1 June on our website. It's called, Outside Business: Why Employers Hate it. I am blogging it today to make sure you didn't miss it. Over the years I have met all kinds of registered reps who wanted to get HNW clients into limited partnerships and other alternative investment vehicles that were not on the firm's "approved" investment list.

FAs expressed frustration that they were losing a client's business to RIAs who could access various LLCs and other alternative investments because the firm regarded the proposed non-custodied investment vehicle as just a case of selling away --- and to an investment pool that has not gone through the firm's own due diligence procedure. In short, the firm's are scared of the liability. If you've encountered this situation, please give me a call. Would like to hear about it, especially in this regulatory/investing climate where fear of "risky" assets is rampant. (That said, I know many FAs who do have use investing partnerships outside their firm's approved list.)

Anyway, here' s Bill Singer's post. And why you should be very selective when asking permission to "sell away." Join the conversation on the topic at Registered Rep.'s Advisor Forums.

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