The Securities and Exchange Commission has been watching alternatives governance at independent advisory firms for more than a decade. Most still have not acted. The cost of inaction is rising.
The question arrives without warning. A client, newly liquid and freshly advised by a family-office contact, leans across the table and says: “Walk me through exactly how you selected the private credit fund you have me in.”
The adviser knows the manager is sound. He met the GP at a conference. The track record looked clean. The conviction was real. What does not exist, in any file, on any server, or in any form that would survive an examination or dispute, is a documented record of how that conviction was formed, what criteria were applied, what alternatives were rejected, and what process supported the recommendation.
That missing file is not an administrative gap. It is a regulatory liability. And the SEC has been signaling, with increasing specificity, that it kno
