SEC Changes Advisory Performance Fee Thresholds

The Securities and Exchange Commission recently adopted a final rule (Rule) to raise the requirements for investors who pay performance-based fees. Registered investment advisers may only charge performance fees to “qualified clients” that meet required net worth or assets under management thresholds. The Rule increases these thresholds, as mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, and excludes the value of the client’s primary residence from the net worth calculation.

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