Amid increasing pressure from regulators, Berthel Fisher & Co. Financial Services Inc., VSR Financial
Services Inc. and Cetera Financial Group Inc., which has four independent-contractor-broker-dealers under its umbrella, have revised policies and/or added guidelines and procedures relating to the suitability for the sale of certain alternative investments – such as private placements and non-traded
Berthel Fisher and VSR are well-known in the independent-broker-dealer industry for their focus on selling such alternative products. Cetera Financial Group has been an active buyer of independent broker-dealers and is widely expected to launch an initial public offering soon.
As for VSR, it is reducing the amount of illiquid alternative investments that clients can hold in their accounts, especially for the elderly. Now, VSR clients can have 35% of their accounts in illiquid investments instead of 40% to 50%. Moreover, for clients who are 70 to 75, the maximum percentage of illiquid investments they can own is 25% of a portfolio. For clients between 75 and 84, the new maximum is 15%. Lastly, VSR will not accept orders for illiquid investments for clients 85 and older.