Are you prepared for regulators to tighten restrictions on alternative strategy mutual funds?

Friday, January 24th, 2020 and is filed under Alternative Strategy Mutual Funds

If your firm approves all fund company mutual funds, additional due diligence may be needed based on continued regulatory guidance on alternative strategy mutual funds.

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Some financial firms have raised questions about the need for conducting additional research on alternative mutual funds given their complex structure compared to traditional mutual funds. Both FINRA and the SEC have published supporting regulatory detail to help differentiate the need for additional due diligence on alternative mutual funds.

How are you demonstrating your understanding of the complexities of alternative strategy mutual funds?

According to PwC’s recent report, Alternative asset management 2020-Fast forward to centre stage, “In the light of the attention from regulators, asset management firms should enter this new line of business well-prepared from a compliance and organisational standpoint. This includes:

  • training
  • assessing customer suitability
  • marketing and education
  • building out compliance and surveillance, and
  • robust liquidity risk management.”

Take the first step. Let AI Insight help your firm:

1) Identify potential risk exposure

2) Determine due diligence needs

3) Establish policies and procedures around Alternative Strategy Mutual Funds

Contact us for a complimentary Risk Exposure Analysis to see if your firm may need to conduct additional due diligence on alternative strategy mutual funds.

Related Regulatory References

Training Resources

December Private Placement Industry Insights

Monday, January 13th, 2020 and is filed under AI Insight News

We recently released our December Private Placement Insights. See the highlights from the report below, or if you are a subscriber, log in now to see the entire report.

  • More private placements were added to our coverage in 2019 than ever before with record months in November and December. The 200 private placement funds added during the year were slightly smaller in overall target raise than 2018, with the aggregate just 1.3% above last year despite the increased number of funds.
  • The industry was led primarily by continued growth in 1031 exchanges and the addition of Opportunity Zone funds. Private equity/debt activity picked up late in the year, as did conservation contributions and energy funds. Other real estate, which includes non-1031 real estate LLCs and LPs trailed, with fund sizes significantly smaller than in prior years.
  • As of January 1st, AI Insight covers 172 private placements currently raising capital, with an aggregate target raise of $16.1 billion and an aggregate reported raise of $7.7 billion or 48% of target. The average size of the current funds is $93.2 million, ranging from $3.4 million for a single asset fund to $2.2 billion for a sector specific private equity/debt fund.
  • 158 private placements closed in 2019, having raised approximately 85% of their target.
  • ON DECK: as of January 1st, there were eight new private placements coming soon.

 

 

 

 

 

 

 

 

 

 

 

Access the full Private Placements report and other hard-to-find alts data

AI Insight’s Industry Reporting capabilities help you review alternative investment trends and historical market data for Private Placements, Non-Traded REITs, BDCs,  Closed-End Funds, and Alternative Mutual Funds. Receive up to 24 extensive reports per year to help broaden your alternative investment reviews.

Log in or subscribe to AI Insight to further research, sort, compare, and analyze all of the private and public funds in our coverage universe. See who’s new in the industry and what trends are impacting the alts space.

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Chart and data as of Dec. 31, 2019, based on programs activated on the AI Insight platform as of this date.

Activated means the program and education module are live on the AI Insight platform. Subscribers can view and download data for the program and access the respective education module. 

On a subscription basis, AI Insight provides informational resources and training to financial professionals regarding alternative investment products and offerings. AI Insight is not affiliated with any issuer of such investments or associated in any manner with any offer or sale of such investments. The information above does not constitute an offer to sell any securities or represent an express or implied opinion on or endorsement of any specific alternative investment opportunity, offering or issuer. This report may not be shared, reproduced, duplicated, copied, sold, traded, resold or exploited for any purpose. Copyright ©2020 AI Insight. All Rights Reserved.

November Private Placement Industry Insights

Monday, December 9th, 2019 and is filed under AI Insight News

We recently released our November Private Placement Insights. Highlights from the report include:

  • November was a record month for private placements, with 30 new funds looking to raise $854 million added to our coverage.
  • Our overall private placement coverage is up year-over-year in terms of new fund coverage and aggregate target raise, led primarily by 1031s and Opportunity Zones. Non-1031 real estate fund activity has picked up again, after trailing most of the year.
  • As of December 1st, AI Insight covers 184 private placements currently raising capital, with an aggregate target raise of $16.8 billion and an aggregate reported raise of $7.9 billion or 47% of target. This includes the 177 private placements added to our coverage in 2019. The average size of the current funds is $90.9 million, ranging from $3.4 million for a single asset fund to $2.2 billion for a sector specific private equity/debt fund.
  • As of December 1st, 122 private placements have closed year-to-date which have raised approximately 88% of their target.
  • As of December 5th, there were twelve new private placements coming soon.

 

 

 

 

 

 

 

 

 

 

 

Access the full Private Placements report and other hard-to-find alts data

AI Insight’s Industry Reporting capabilities help you review alternative investment trends and historical market data for Private Placements, Non-Traded REITs, BDCs,  Closed-End Funds, and Alternative Mutual Funds. Receive up to 24 extensive reports per year to help broaden your alternative investment reviews.

Log in or subscribe to AI Insight to further research, sort, compare, and analyze all of the private and public funds in our coverage universe. See who’s new in the industry and what trends are impacting the alts space.

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Chart and data as of Nov. 30, 2019, based on programs activated on the AI Insight platform as of this date.

Activated means the program and education module are live on the AI Insight platform. Subscribers can view and download data for the program and access the respective education module.

On a subscription basis, AI Insight provides informational resources and training to financial professionals regarding alternative investment products and offerings. AI Insight is not affiliated with any issuer of such investments or associated in any manner with any offer or sale of such investments. The information above does not constitute an offer to sell any securities or represent an express or implied opinion on or endorsement of any specific alternative investment opportunity, offering or issuer. This report may not be shared, reproduced, duplicated, copied, sold, traded, resold or exploited for any purpose. Copyright © 2019 AI Insight. All Rights Reserved.

Are you doing enough to protect client data?

Friday, December 6th, 2019 and is filed under AI Insight News

Be proactive about internet security risks and unauthorized data access that can impact clients and your business.

The financial services industry is certainly aware of potential security vulnerabilities and risks. While protections are in place, cybersecurity isn’t keeping pace with the technology advances in the financial services industry according to “The State of Software Security in the Financial Services Industry”. The survey conducted as part of the report also shows that 65% of respondents are concerned with complying with cybersecurity requirements.

 

 

 

 

 

 

 

 

Source: The State of Software Security in the Financial Services Industry

How does your firm compare?

The research report was commissioned by the Synopsys Cybersecurity Research Center (CyRC) and conducted by the Ponemon Institute. It includes a survey of over 400 IT security practitioners in various sectors of the financial services industry, including banking, insurance, mortgage lending/processing, and brokerage.

Read the detailed survey results here to see how your firm compares, including:

  • The software security posture of financial services companies
  • Risks to financial software and applications
  • Security practices in the design and development of financial service software and technologies

How regulators look at cybersecurity and key strategies to be compliant

Not only is data security a concern, but regulators have also taken interest in cybersecurity risks that may impact financial firms. Below are five things every regulator looks for during an audit:

  • Risk Register
  • Framework and Assessment of the Security Program
  • Strategy and Roadmap
  • Incident Response Plan
  • Governance & Centralized Management

7 security tips for financial firms

Take a look at 7 security tips for financial firms to learn about steps you can take such as training, establishing policies and securing devices to help lessen your security risks. The first tip recommends employee training, which the Ponemon Institute study mentions is often not mandated within organizations.

AI Insight collaborated with Docupace Technologies, LLC and Beacon Strategies, LLC to develop a CE Course, “Cybersecurity Awareness for Financial Professionals” to help you better understand the regulatory focus on cybersecurity, the threat landscape and practical things you can do to protect client data. This course is eligible for 1 credit toward the CFP® and other designations. Learn more

Have you reviewed your policies for non-traditional ETFs?

Wednesday, November 20th, 2019 and is filed under AI Insight News

Considerations when working with non-traditional ETFs

North American Securities Administrators Association (NASAA) recently released a report recommending that broker dealers review policies and procedures for non-traditional exchange traded funds (ETFs).

“The NASAA report recommends tailored supervisory procedures be established for firms that allow leveraged and/or inverse ETF transactions. Further, that the supervisory procedures address the heightened and specific risks associated with these complex products.”

Click here to download the full report.

Be proactive to fully understand non-traditional ETFs

Leveraged ETFs are investment vehicles for sophisticated investors who are looking to gain short-term magnified exposure to the markets. However, it’s important to clearly understand that their unique characteristics come with inherent risk. Take AI Insight’s CE course, Introduction to Leveraged and Inverse ETFs, to help you understand the composition of leveraged ETFs, mechanics of how they operate, and risks associated with them. This course is eligible for 1 CE credit toward the CFP® and other designations.

October Private Placement Industry Insights

Friday, November 8th, 2019 and is filed under AI Insight News

We recently released our October Private Placement Insights. Highlights from the report include:

  • October private placement activity picked up after a slow September, primarily in the 1031 category.
  • Our overall private placement coverage is up year-over-year in terms of new fund coverage and aggregate target raise, led primarily by 1031s and Opportunity Zones, while most other categories remain below last year’s levels.
  • Our coverage of hedge funds and managed futures has not expanded in 2019. We discussed this in our September Private Placements podcast. We believe the minimal activity in the hedging and futures space can be attributable to a few factors. One is that funds and fund-of-funds used by many retail firms tend to be larger with a perpetual life that have been around for many years and used as needed. Allocations to hedging and futures strategies also tend to be smaller in the retail channel than the institutional side, so fewer options are available and many use liquid alternatives for these allocations, where we have seen a lot of growth and increased coverage in recent years. Additionally, the strong equity market over the last decade has minimized the focus on hedging and futures strategies.
  • As of November 1st, AI Insight covers 171 private placements currently raising capital, with an aggregate target raise of $16.2 billion and an aggregate reported raise of $7.6 billion or 46.9% of target. This includes the 147 private placements added to our coverage in 2019.
  • As of November 1st, 111 private placements have closed year-to-date which raised approximately 86% of their target raise. While there are still two months remaining, funds this year have come closer to their targets than last year, when the 160 private placements that closed in FY 2018 raised approximately 63% of their target.

Access the full Private Placements report and other hard-to-find alts data

AI Insight’s Industry Reporting capabilities help you review alternative investment trends and historical market data for Private Placements, Non-Traded REITs, BDCs,  Closed-End Funds, and Alternative Mutual Funds. Receive up to 24 extensive reports per year to help broaden your alternative investment reviews.

Log in or subscribe to AI Insight to further research, sort, compare, and analyze all of the private and public funds in our coverage universe. See who’s new in the industry and what trends are impacting the alts space.

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Chart and data as of Oct. 31, 2019, based on programs activated on the AI Insight platform as of this date.

 Activated means the program and education module are live on the AI Insight platform. Subscribers can view and download data for the program and access the respective education module.

 On a subscription basis, AI Insight provides informational resources and training to financial professionals regarding alternative investment products and offerings. AI Insight is not affiliated with any issuer of such investments or associated in any manner with any offer or sale of such investments. The information above does not constitute an offer to sell any securities or represent an express or implied opinion on or endorsement of any specific alternative investment opportunity, offering or issuer. This report may not be shared, reproduced, duplicated, copied, sold, traded, resold or exploited for any purpose. Copyright © 2019 AI Insight. All Rights Reserved.

Transition your advisor practice from typical to exceptional

Saturday, October 19th, 2019 and is filed under AI Insight News

Put your focus on non-delegable tasks and pass on the rest to help you create a leading advisory practice.    

A typical financial advisor works an average of 43 hours per week, yet spends only 19% of their time meeting with clients according to a recent study conducted by Kitces.com. The study shows that only an additional 17% of time is spent on prospecting, leaving a significant gap of time spent on tasks that they should consider delegating to help improve their business results.

 

What should my practice look like?

The 80/15/5 Rule For Financial Advisors by Forbes suggests the Kitces study is a “wake-up call” for advisors noting that their practice should be treated as any small business. To increase the potential for success, an advisor should focus 80% of their time on their expertise – meeting with clients and prospecting. For the remaining time, they suggested that advisors focus 15% on “learning and expanding spheres of knowledge and influence, and 5% with staff or team-building”.

What efficiencies can help improve my practice?

The Kitces study calls out that “a combination of technology and delegation of tasks” outside of an advisor’s expertise such as administration, human resources, marketing and meeting preparation can help an advisor transition to spending a much larger percentage of time face-to-face with clients.

The Forbes article notes that while there are additional costs incurred with outsourcing, the cost is actually greater when the advisor spends time doing delegable tasks rather than leaving it to an expert or creating efficiencies using technology tools.

3 steps to start your advisory practice transition

  • Make a list of your recurring tasks that could be delegated such as calling to set appointments, posting on social media to promote your business, investment research, or inputting data for your financial plans.
  • Gather references to connect with people who have expertise to help fill your gaps, such as a freelance marketer or a financial support professional.
  • Look at tasks that can be done more efficiently through technology such as managing clients with a reliable CRM or implementing financial planning software.

If you’re working with alternative investments, consider using the AI Insight platform to research hundreds of alternative investments and efficiently conduct side-by-side feature comparisons to help you source products. AI Insight currently covers over 200 non-traded alternative investment funds representing $33 billion in assets, and over 80 alternative strategy mutual funds, representing nearly 80% of the AUM of the alternative strategy mutual fund market.

September Private Placement Insights

Monday, October 14th, 2019 and is filed under AI Insight News

We recently released our September Private Placement Insights. Highlights from the report include:

  • September private placement fund formation was the slowest of the year, coming off of a strong August.
  • Given the slower pace in September, our private placement coverage is essentially flat year-over-year, with all categories down in terms of new fund coverage and target raise except 1031 exchanges and Opportunity Zone funds.
  • As of September 30th, AI Insight covers 155 private placements that are currently raising capital, with an aggregate target raise of $15.9 billion and an aggregate reported raise of $7.7 billion or 51.5% of target. This includes the 120 private placements added to our coverage in 2019.
  • As of September 30th, 87 private placements have closed year-to-date which raised approximately 92% of their target raise, compared to 160 private placements that closed in FY 2018 which raised approximately 63% of their target.

 

 

 

 

 

 

 

 

 

 

 

 

Log in or subscribe to AI Insight to further research, sort, compare, and analyze all of the private and public funds in our coverage universe. See who’s new in the industry and what trends are impacting the alts space.

AI Insight’s Industry Reporting capabilities help you review alternative investment trends and historical market data for Private Placements, Non-Traded REITs, BDCs,  Closed-End Funds, and Alternative Mutual Funds. Receive up to 24 extensive reports per year to help broaden your alternative investment reviews. Click here to request a sample report.

Watch this tour or request a live demo of AI Insight’s expansive Industry Reports customized to your business needs. 

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Chart and data as of Sept. 30, 2019, based on programs activated on the AI Insight platform as of this date.

Activated means the program and education module are live on the AI Insight platform. Subscribers can view and download data for the program and access the respective education module.

On a subscription basis, AI Insight provides informational resources and training to financial professionals regarding alternative investment products and offerings. AI Insight is not affiliated with any issuer of such investments or associated in any manner with any offer or sale of such investments. The information above does not constitute an offer to sell any securities or represent an express or implied opinion on or endorsement of any specific alternative investment opportunity, offering or issuer. This report may not be shared, reproduced, duplicated, copied, sold, traded, resold or exploited for any purpose. Copyright © 2019 AI Insight. All Rights Reserved.

August Private Placement Insights

Wednesday, September 18th, 2019 and is filed under AI Insight News

We recently released our August Private Placement Insights. Highlights from the report include:

  • As of August 31st, AI Insight covers 164 private placements that are currently raising capital, with an aggregate target raise of $11.5 billion and an aggregate reported raise of $7.3 billion. This includes the 114 private placement funds added to our coverage in 2019.
  • 1031 exchanges continue to expand. This is understandable given the long-term run in commercial real estate prices, as investors look to capture gains and defer taxes.
  • There were 10 new 1031s added to our coverage in August, with an aggregate target raise of $339.4 million. This is higher than the prior month, and the category remains ahead YoY in terms of new fund formations and aggregate target raise.

Log in or subscribe to AI Insight to further research, sort, compare, and analyze all of the private and public funds in our coverage universe. See who’s new in the industry and what trends are impacting the alts space.

AI Insight’s Industry Reporting capabilities help you review alternative investment trends and historical market data for Private Placements, Non-Traded REITs, BDCs,  Closed-End Funds, and Alternative Mutual Funds. Receive up to 24 extensive reports per year to help broaden your alternative investment reviews. Click here to request a sample report.

Watch this tour or request a live demo of AI Insight’s expansive Industry Reports customized to your business needs. 

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Chart and data as of August 31, 2019, based on programs activated on the AI Insight platform as of this date.

 Activated means the program and education module are live on the AI Insight platform. Subscribers can view and download data for the program and access the respective education module.

 On a subscription basis, AI Insight provides informational resources and training to financial professionals regarding alternative investment products and offerings. AI Insight is not affiliated with any issuer of such investments or associated in any manner with any offer or sale of such investments. The information above does not constitute an offer to sell any securities or represent an express or implied opinion on or endorsement of any specific alternative investment opportunity, offering or issuer. This report may not be shared, reproduced, duplicated, copied, sold, traded, resold or exploited for any purpose. Copyright © 2019 AI Insight. All Rights Reserved.

Are you prepared for a market correction?

Monday, August 19th, 2019 and is filed under AI Insight News

Have you recently reviewed your policies and procedures around Alternative Mutual Funds? Use the resources below to help your advisors better understand your firm’s best practices. It’s always best to address areas for improvement prior to market corrections, which seem to highlight such deficiencies.

How would you answer the following questions?

  1. Does your firm approve all fund company mutual funds?
  2. Is your firm performing the additional due diligence needed based on continued regulatory guidance?
  3. Does your firm have an efficient solution to establish and enforce best practices?

Related Regulatory References

Watch the video and view this checklist to learn more.