SMA Industry Braces for Shake Up as SEC Focuses on Model and Index Providers

If the SEC determines that asset managers providing model-delivered separately managed accounts are acting as investment advisors, they would be responsible for reviewing information on clients invested in the model to ensure that the strategy is appropriate, said Craig Kilgallen, director of relationship development at FUSE Research Network. “You’d have to know your clients’ type of due diligence, and I don’t know how you would do that on those model marketplaces,” he said. “On probably a larger platform that has an investment advisor, there’s probably a little bit more protection there.” Kilgallen also questioned whether such regulations could end up forcing some managers to move away from model delivery and back to manager-traded portfolios.

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Article published on June 22, 2022