Kevin Hughes, Chief Growth Officer for Due Diligence Works, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss the importance of product information and due diligence in portfolio construction and regulatory compliance.
Due Diligence Works evaluates packaged products, including ETFs, mutual funds, annuities, structured products, and alternative investments. Clients include RIAs, broker-dealers, and wirehouses. It is easy to build a product portal to compare features across products. Starting with an investment objective, advisors can search across products by features such as cost or minimum investment. The qualitative and quantitative due diligence analysis can help advisors justify investment choices from a best interest perspective. During the qualitative due diligence process, the firm regularly engages in discussions with product issuers, as well as broker-dealers and RIAs invested in the products.
The firm’s work on regulatory technology aims to alleviate the pain points of ERISA rollovers for RIAs and address Reg BI issues for broker-dealers and hybrid RIAs. Defending for best interest has been an important exercise for over a decade. When rolling assets over from a low-fee 401(k) plan, advisors can utilize the fee lookup feature to understand the costs associated with the products their clients are both selling and buying.
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