Tests for Qualified Clients of RIAs Raised

Under the Investment Advisers Act of 1940, registered investment advisers (“RIAs”) are prohibited from charging advisory clients performance fees based on a percentage of gains of the funds of a client unless all such advisory clients have, as set forth in Rule 205-3, either assets under management with the RIA of at least $1 million or a net worth of at least $2 million.  These tests have been raised, effective August 16, 2021, to $1.1 million and $2.2 million, respectively.