Top 10 Louisiana Advisers
For this edition, I thought that we would look at the top ten SEC registered investment advisers within the State of Louisiana. The SEC publishes a comprehensive database that captures all information submitted by advisers in their Form ADV’s. There is a total of 55 advisers registered with the SEC in Louisiana. Using this data, we came up with a list of the top Louisiana registered investment advisers by assets under management (“AUM”) and by number of accounts. For purposes of these rankings, we excluded advisers that are: (i) headquartered out of state, (ii) did not provide advisory services to the public, or (iii) umbrella organizations for groups of unaffiliated advisers. For the ranking of advisers by number of accounts, we included a column showing the percentage of accounts that are held by individuals, who are not high net worth individuals (net worth >$2.1 million).
There is a lot of data that we did not publish. Let us know if there is a data summary that you would like to see.
Top Louisiana Advisers Ranked by Assets under Management
Top Louisiana Advisers Ranked by Number of Accounts
SEC Issues New Proxy Guidance for Advisers
On August 21, 2019, the SEC issued new guidance on the voting of proxies by investment advisers.* This release sets forth the investment adviser’s proxy voting responsibilities in the context of the adviser’s fiduciary duties to its clients.
Rule 206(4)-6 under the Advisers Act requires an investment adviser who exercises voting authority with respect to client securities to adopt and implement written policies and procedures that are reasonably designed to ensure that the investment adviser votes proxies in the best interest of its clients. Under this rule, “[i]nvestment advisers are fiduciaries that owe each of their clients duties of care and loyalty with respect to services undertaken on the client’s behalf, including voting.”
The guidance in the release is provided in a question and answer format and is organized by six key areas:
- How investment advisers and their clients set forth or limit the investment advisers’ authority to vote proxies on their client’s behalf;
- How an investment adviser can demonstrate that it is making voting determinations in the client’s best interest and in accordance with the investment adviser’s proxy voting policies and procedures;
- What factors an investment adviser should assess when engaging the services of a proxy advisory firm;
- Steps an investment adviser should consider taking when it becomes aware of potential factual errors, potential incompleteness, or potential weaknesses in methodologies in a proxy advisory firm’s analysis that may materially affect one or more of the investment adviser’s voting determinations;
- How an investment adviser should evaluate the services of a proxy advisory firm that it retains, including evaluating any material changes in services or operations by the proxy advisory firm; and
- Whether an investment adviser is required to exercise every opportunity to vote a proxy for a client where it has assumed proxy voting authority on behalf of the client.
Putting an exclamation point on this guidance, the SEC recently sanctioned two investment advisers who voted proxies for clients even though their advisory agreements and their ADV’s stated that the adviser would not vote proxies on behalf of their clients.** In each case, the adviser was solicited by a broker-dealer to vote securities held in their client portfolios and the adviser subsequently signed a proxy on behalf of certain client accounts. The SEC found in both instances that the advisers “violated Section 206(2) of the Advisers Act, which prohibits an investment adviser from “engag[ing] in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client.” Both advisers agreed to a cease and desist order and the payment of a civil monetary penalties of $60,000 and $40,000 respectively.
The bottom line — the SEC takes proxy voting by advisers very seriously. In most cases, we recommend not voting proxies for your clients. If your advisory agreement excludes voting on behalf of your clients, then you cannot vote the client’s proxy. If you do have proxy authority, then you must adopt and document procedures to demonstrate that you are fulfilling your duty to your clients.
*Commission Guidance Regarding Proxy Voting Responsibilities of Investment Advisers, Investment Advisers Act Release No. IA-5325 (Aug. 21, 2019), available at https://www.sec.gov/rules/interp/2019/ia-5325.pdf.
**In the Matter of Three Bridge Wealth Advisors, LLC, Investment Advisers Act Release No. IA-5375, SEC (Sept. 27, 2019); In the Matter of Amadeus Wealth Advisors, LLC, Investment Advisers Act Release No. IA-5374., SEC (Sept. 27, 2019)
Disclaimer: This Blog/Web Site is made available by the law firm of Liskow & Lewis, APLC (“Liskow & Lewis”) and the individual Liskow & Lewis lawyers posting to this site for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice as to an identified problem or issue. By using this blog site you understand and acknowledge that there is no attorney client relationship formed between you and Liskow & Lewis and/or the individual Liskow & Lewis lawyers posting to this site by virtue of your using this site. The Blog/Web Site should not be used as a substitute for legal advice from a licensed professional attorney in your state regarding a particular matter.
Privacy Policy: By subscribing to Liskow & Lewis’ E-Communications, you will receive articles and blogs with insight and analysis of legal issues that may impact your industry. Communications include firm news, insights, and events. To receive information from Liskow & Lewis, your information will be kept in a secured contact database. If at any time you would like to unsubscribe, please use the link located at the bottom of every email that you receive.