06.23.21

SEC Adjusts 'Qualified Client' Threshold for Advisor Performance Fees

by: Melanie Waddell

The SEC has approved increasing the thresholds of the assets-under-management test and the net worth test for when an advisor is allowed to charge performance fees to “qualified investors.” Beginning Aug. 16, the dollar amount of the assets-under-management test will rise from $1 million to $1.1 million. Meanwhile, the net worth test dollar amount will increase from $2.1 million to $2.2 million. The SEC defines a qualified client as a natural person or company that the investment advisor entering into the contract believes, immediately prior to entering into the contract, has a net worth of more than $2.2 million, the SEC explains.

Read the full article on Think Advisor.