In an attempt to keep all of our clients informed. We post the following from IPA, Investment Program Association.
Although we are an Investment Advisory Firm and we are not associated with a Broker Dealer, there will be some changes to our client reporting as we do hold many non-traded REIT’s and BDC’s.
Important Information Regarding Your Account Statement
The Investment Program Association (IPA), in partnership with your Broker Dealer, is
pleased to provide some important information about new changes to your account
statement. New FINRA regulations effective in April 2016 require a modification to the way
your non-traded REIT or BDC investment is reflected on your statement. Designed to
provide greater transparency, this modification in no way affects your investment or
distribution rate. Below are some Frequently Asked Questions regarding these changes:
What changes can I expect?
Prior to April 2016, non-listed REITs and Direct Participation Programs reported share
values at the per share price at time of purchase. In most cases this meant that the
statement reflected the purchase price of $10 per unit. This value did not take into account,
however, the fluctuations in the underlying assets nor did it account for costs associated
with organizing and selling the investment.
Beginning on April 11, 2016, customer account statements will reflect one of two
methodologies designed to provide more transparency on fees or timely valuation of the
What are the benefits to this change?
• Share price clarity through Net Investment method – Even though some of the
investment management expenses are estimates, deducting these costs from your
total investment will provide a clearer view of your assets.
• Increased frequency of independent appraisals through Appraised Value method – The
most reliable method to assess the value of underlying assets is to have them
appraised by an independent third party. Part of the rule change requires appraisals
earlier in the process and more frequently throughout the term of your investment.
How does this change the objectives of the investment?
It doesn’t. The purpose of the rule change is to provide greater transparency to your
account value. It does not in any way affect the underlying investment or the investment
program’s objectives. You will have the continued ability to work with your advisor and
invest with the same managers that you have in the past.
Where can I find out more?
Your financial advisor is participating in continued training and education on these changes.
Please contact them with any questions or concerns that you may have and they will be able
to provide more detailed information. You can also read about this change in statement
reporting by visiting the IPA website education page (http://www.ipa.com/customeraccount-