SEC to examine Investment Advisors for conflicts of interest

Fund allocators in Private Banking and so-called Hedge Fund of Funds have traditionally been a major source of investment money that found its way into the Hedge Fund sector. Both sources are widely spread internationally and have been subject to little or no supervision and regulation until now. There is also scant disclosure of the terms they exact from the funds they allocate money too and many investors - especially private individuals - did not know to ask the right questions and were also kept in the dark. So we welcome the decision by the SEC to examine whether firms that collect fees for funneling investors into hedge funds are properly overseeing client money and dealing with potential conflicts of interest (Wall Street Journal, 10 Sept 2010).