FactRight has partnered with advisory firms Kalos Financial and BCJ Financial to help expand their businesses into alternative investment platforms.
According to Scott Smith, FactRight president, availability of dedicated resources to effectively support alternatives can be challenging for firms of all sizes.
“With the overwhelming flux of data and ever-changing nature of alternatives, it’s not feasible for firms to simply dabble in this business; it requires a continuous commitment to diligence and training to avoid risk,” said Smith.
Since the great recession, investors have become more interested in nontraditional investment vehicles as a hedge against the volatility of traditional markets. However, despite consumer interest, many broker-dealer and RIA firms have held back due to the complexity of working with alternatives, a term that encompasses an unusually broad range of investment types. A 2017 survey by InvestmentNews Research found that 67 percent of advisers reported that a lack of understanding discouraged them from greater allocations into alternatives.
“We had come to the realization that the amount of work needed to accommodate 1031 exchange investment opportunities was becoming problematic for us,” said Kalos’ EVP and due diligence officer Larry Lyons. “It was slowing down the review time of other offerings we were in the middle of pursuing due to the 1031 exchange time constraints that must be met for identifying properties. By employing FactRight’s full spectrum of diligence and training services, we are able to reduce the strain on our internal resources while continuing to support operational needs and growth opportunities for our firm.”
BCJ Financial Group, an RIA firm with offices throughout the United States, reached out to FactRight as it considered the issues of regulatory compliance and advisor education while planning its foray into alternatives.
