July 23, 2018
A few comments:
1. Imposing dramatic net worth requirements on small RIAs would be onerous, expensive, and basically prevent any of them from getting into the business.
Using fraud as the reason is a flawed argument. There will ALWAYS be Ponzi schemers...you'll never regulate it away. So how would you use a fraudster as the target? Require someone with $30MM AUM to have $30MM net worth? What's the threshold of coverage? It just doesn't make sense.
2. The biggest confusion I see in the market is 'advisor/adviser' titles. You have a chance to fix that, it would be simple and very effective, please do it. I've seen countless clients/consumers come to me with extremely bad, inappropriate products, things that should never be sold, and the person that sold them was an 'advisor.' If you don't limit that title to Fiduciaries only, you will have fixed nothing. I've seen dually registered individuals operate before, I was one. They sell whatever they want with no regard to any 'best interest' of the client.