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Highlights from FactRight’s Fourth Annual Due Diligence Conference

by Brandon Raatikka

We’d like to thank our broker dealer and registered investment clients, as well as the sponsors, for making this year’s FactRight Due Diligence Conference—held last week at the Westin Edina Galleria—our finest yet. As the FactRight staff recovers from busy weeks of preparation and putting on the conference itself, we are grateful for the positive feedback we’ve received from many attendees.

As you can see, the three-day conference was fully packed with presentations and group discussions that addressed both common concerns around AIs in today’s uncertain environment:

  • Broker dealers and registered investment advisors had meaningful discussions on how they deal with the dynamic business and regulatory challenges in the alternative investments space. Attendees collaborated with FactRight in several closed-door sessions designed to gauge and address concerns around specific alternative investment topics, including initial and ongoing due diligence, closed products, offerings featuring conservation easement options, and real estate syndicated for section 1031 exchanges.
  • Executives from 19 alternative investment sponsor firms previously reviewed by FactRight presented on their products and took questions from the audience.
  • Via networking time and numerous cocktail receptions and dine-arounds, 120 industry professionals (representing 42 unique broker dealer and RIA firms) connected and spent some time in Minnesota during its best time of year.

The conference also offered a robust lineup of timely educational sessions:

  • Mercer Bullard, professor at the University of Mississippi and founder and president of Fund Democracy, gave a fascinating perspective on the DOL fiduciary rule, unpacking what it means for a financial advisor to give investment advice without regard to the advisor’s financial interest and within the best interests of the client. In addition to clarifying many aspects of the new rule, he emphasized that any differing compensation at the advisor level must be justified based on a limited set of neutral factors. Consensus feedback from the audience was that Professor’s Bullard’s presentation was one of the most cleared-headed assessments of the fiduciary rule ever heard.
  • Mike Rothman, commissioner of the Minnesota Department of Commerce and outgoing president of the North American Securities Administrators Association (NASAA), reflected on his tenure as a securities regulator, speaking about a wide swath of regulatory issues, from concentration guidelines to protection of senior investors. Audience participation in the question and answer session was lively, and Commissioner Rothman was gracious in spending extra time to make sure all questions were addressed.
  • Tony Benson, portfolio manager at Keel Point, enlightened the audience on how alternative investments enhance a portfolio’s returns without adding relative risk compared to a full allocation of stocks and bonds (or other benchmarks). If you liked what you heard in Tony’s presentation, check out his investment bulletins for more information on Keel Point’s investment philosophy and strategy.
  • FactRight staff also presented a buffet of topics, including a survey of the current status of AR Global-sponsored investment programs by analyst Jake Heidkamp; a dissection of the opportunities and pitfalls of popular credit strategies by FR Risk Management senior analyst Jacob Mohs; and an illuminating presentation on how to assess the reasonableness of fees for alternative investment products by FR Risk Management chief operating officer Gail Schneck. I also presented on deciphering and applying the FINRA regulatory framework regarding complex financial products.

Slides from all of the educational and sponsor presentations are now available on FactRight’s Report Center. We’d be happy to put you in touch with any of our conference presenters.

 

At the conference, our president Scott Smith announced the launch of FactRight’s True Diligence platform, designed to provide you with customized intelligence, product support, and training services so you can best advise your clients on alternative investments. We are very excited to bring you a new level of service to help solve your most pressing issues surrounding alternatives. Please reach out to Scott for more information, and we hope to see you next year at FactRight’s Fifth Annual Due Diligence Conference!