I request you do NOT add new requirements or restrictions to those funds deemed "complex." The term itself can be vague at best and requiring consumers to jump through arbitrary hoops still doesn't reduce the risk of harm in any way, but it could potentially exclude individuals from benefiting from their added diversification.
As a recent investor in several partnerships that issue K-1 forms, I can say having to provide an acknowledgment through my broker indicating acceptance of the risk didn't change my investment decision. Passing a test or meeting some arbitrary net worth requirement would also not guarantee my investing abilities, but rather demonstrate how well I can read online study guides and show off my inheritance. None of these will serve to make me a better investor, but they do add to the cost and complexity required for me to ultimately access the same financial instruments I can today.
No, instead I choose to take responsibility over my finances and become an informed investor. I read the prospectus for funds I invest in and make myself aware of the risks. No fund/instrument is a guaranteed return. However, many serve a valid purpose in a diversified portfolio even as a hedge against other investments and don't need to be restricted to only those who can afford them or are deemed responsible enough. They've given me access to markets and sectors where the barriers to entry may otherwise be prohibitive for an individual. Others should be able to determine whether these funds fit their risk profile as well without being blocked from them. The surge in sector ETFs over the last decade has been a boon to the average consumer by offering more choice, lower fees, and mote creative investing options than were previously available. The gamification of trading by investing apps during the covid era shouldn't lead to a knee-jerk reaction that limits consumer choice once again.
I urge you to reconsider applying new restrictions and let the individual decide what's best for them
Matt Picard Comment On Regulatory Notice 22-08
To whom it may concern,
I request you do NOT add new requirements or restrictions to those funds deemed "complex." The term itself can be vague at best and requiring consumers to jump through arbitrary hoops still doesn't reduce the risk of harm in any way, but it could potentially exclude individuals from benefiting from their added diversification.
As a recent investor in several partnerships that issue K-1 forms, I can say having to provide an acknowledgment through my broker indicating acceptance of the risk didn't change my investment decision. Passing a test or meeting some arbitrary net worth requirement would also not guarantee my investing abilities, but rather demonstrate how well I can read online study guides and show off my inheritance. None of these will serve to make me a better investor, but they do add to the cost and complexity required for me to ultimately access the same financial instruments I can today.
No, instead I choose to take responsibility over my finances and become an informed investor. I read the prospectus for funds I invest in and make myself aware of the risks. No fund/instrument is a guaranteed return. However, many serve a valid purpose in a diversified portfolio even as a hedge against other investments and don't need to be restricted to only those who can afford them or are deemed responsible enough. They've given me access to markets and sectors where the barriers to entry may otherwise be prohibitive for an individual. Others should be able to determine whether these funds fit their risk profile as well without being blocked from them. The surge in sector ETFs over the last decade has been a boon to the average consumer by offering more choice, lower fees, and mote creative investing options than were previously available. The gamification of trading by investing apps during the covid era shouldn't lead to a knee-jerk reaction that limits consumer choice once again.
I urge you to reconsider applying new restrictions and let the individual decide what's best for them