Oct. 6, 2026
I support the Commission's proposal to let more investors choose performance-based fee arrangements and to recognize accredited investors as qualified clients. Adults who meet the accredited investor standard are already trusted to buy private offerings; they should also be free to agree to a fee structure that ties their adviser's pay to results. I ask the Commission to finish the job in four ways: (1) Align the definitions fully. If accredited investors are qualified clients, the Commission should also accept every path to accredited-investor status it recognizes, including professional credentials and any knowledge-based exam it adopts, rather than measuring sophistication by wealth alone. (2) Make disclosure plain. For regulated funds, require a short, plain-English statement of how the performance fee works, the benchmark or hurdle used, any high-water mark, and a worked example of fees in a good year and a bad year, placed where shareholders will actually see it. (3) Keep shareholder protections. Any move from a fixed or fulcrum fee to a performance fee in an existing regulated fund should require approval by the fund's independent directors and its shareholders, with an easy way for shareholders who disagree to exit. (4) Avoid new paperwork that only large firms can afford. The new disclosure items on fund forms should reuse data advisers already compute, so small advisers can compete for these mandates. Freedom of contract, honest disclosure, and shareholder consent will serve investors better than a rule that decides for them which fee arrangements they may choose. Thanks,