Insights from the experts in investment fiduciary responsibility.

Fiduciary Links: FINRA Provides Notice to Stop Misleading Investors on REITs

Posted by fi360 Team on May 06, 2013

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>>>>FINRA has released guidance to member firms regarding how they should be communicating to investors regarding REITs and real estate direct participation programs. The memo addresses eight areas in which firms have shown deficiencies when communicating about the products: dislcosures, distribution rates, stability/volatility claims, redemption features and liquidity events, performance of prior related real estate programs, use of indices and comparisons, pictures of specific properties, and capitalization rates. In each section, the notice provides guidance for how these aspects should be communicated in a way that does not mislead investors. In addition to the specific guidance regarding REITs, the notice is worthwhile reading for the insight it provides into how FINRA expects communications to accurately reflect an investment program.

Media coverage: [InvestmentNews] [Wall Street Journal

>>>>On a lighter note: While the debate over the virtues of passive versus active management typically centers around considerations of performance expectations, cost, investor time horizon, risk, etc., apparently we also need to start taking patriotism into account when choosing which path is right for you. 

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