Small Advisers, Private Equity Investments Among Topics at AMAC Meeting
The most recent meeting of the SEC’s Asset Management Advisory Committee focused on a number of topics, including private equity investments for retail investors; the role of small advisers; and technology’s impact in the evolution of financial advice. In its presentation, AMAC’s private equity subcommittee recommend that the SEC consider permitting retail investors access to a wider range of private investments and that sufficient investor protections be put in place via the registered investment fund framework. In a presentation from the Investment Adviser Association, speakers focused on the business environment and challenges for smaller advisers such as regulations, competition, scalability, technology/infrastructure, M&A, outsourcing, and cybersecurity. In remarks to the meeting, Commissioner Hester Peirce agreed with presenters that the definition of small adviser may warrant reconsideration. Peirce noted that a small adviser is currently defined as a firm with assets under management of less than $25 million, however the IAA’s materials pointed out that almost 60% of advisers have assets under management of $100 million to $1 billion; most assets are managed by a small number of very large advisers; and nearly 90% of all advisers have 50 or fewer non-clerical employees, with a median number of eight employees. “Regardless of what our rule says, these are small firms who feel keenly the cost of each additional regulatory requirement the Commission imposes,” Peirce said.