An examination by the Securities and Exchange Commission found that pension fund consultants and other advisors were lax in vetting alternative investments.
The SEC's Office of Compliance Inspections and Examinations issued a Risk Alert, reminding advisors it is part of their fiduciary duty to ensure any investment meets a client's investment objectives and is consistent with the written objectives of a fund.
"Money continues to flow into alternative investments. We thought it was important to assess advisers' due diligence processes and to promote compliance with existing legal requirements, including the duty to ensure that such investments or recommendations are consistent with client objectives," said OCIE Director Drew Bowden.
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