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The DI Wire Q&A with Tony Chereso, President and CEO of the Institute for Portfolio Alternatives

The DI Wire had a chance to speak with Tony Chereso, president and CEO of the Institute for Portfolio Alternatives, about the trade group’s AltsEDGE conference held on June 17-18, the federal opportunity zone program, the IPA’s legislative and regulatory priorities, and its Women’s Initiatives Network.

Non-traded alternative investments, which the IPA refers to as portfolio diversifying investments (PDIs), continue to experience renewed growth and expansion. Can you talk a little bit about the topics the event will cover, and what attendees can expect from your lineup of panelists? 

As demand for PDIs continues to grow among the investment community, the IPA seeks to help educate our members and the greater advisor community. We want to showcase the breadth of the investment opportunities available, share industry best practices and guidelines, and offer insights on the emerging legislative and regulatory environment. We’re also focused on the latest operational and technology solutions, all of which are designed to help grow their business.

AltsEDGE is an immersive two-day event featuring a thoughtfully curated lineup of industry experts. We’ll do a deep dive on the most pertinent topics related to retail alternative investing, including incorporating PDIs in portfolio construction, compliance best practices, due diligence considerations and technology solutions for effective client onboarding and business growth.

Can you explain why – especially in today’s environment – it’s important for RIAs to have a comprehensive understanding of the non-traded alternative investment landscape?

We continue to see new products and rapid growth from world-class asset managers as they expand their offerings of portfolio diversifying investment strategies. Today’s retail investor has equal access to the same world class investment strategies traditionally only available to institutional investors. The industry as a whole has undergone a significant evolution, with new product structures providing access to alternatives for investors seeking lower correlation to traditional equities.

With that growth comes a need to more effectively communicate the options for clients looking to diversify their portfolios with the goal of generating better risk-adjusted returns. It’s prudent that today’s RIA be familiar with alternative investment strategies outside of traditional equities when looking to diversify with real assets.

We’ve seen a lot of progress on new and emerging alternative products in the past year, especially opportunity zones. How are broker-dealers and RIAs dissecting the latest product offerings and breaking down strategies for successful opportunity zone investments? 

Qualified opportunity zones (QOZ) offer advisors and accredited investors a new tool to create tax efficient investment portfolios. It’s been decades since the industry has seen a new tax strategy and opportunity this significant.

Now that the Treasury Department has published a second tranche of guidance on QOZs, we’re seeing a significant push to bring funds to market. According to the law firm Novogradac, 134 QOZ funds have been established to date, representing $29 billion in new economic development and investment opportunity.

But as with any new investment strategy, it’s imperative to understand client suitability, and particularly with QOZ funds, any future tax implications of the investment. In terms of due diligence, its critical to understand the strength and expertise of the asset manager executing the fund strategy.

The IPA is committed to arming the advisor community with tools to evaluate not only the tax benefits that QOZ funds can offer, but also the value of the underlying investment for their clients. We recently represented the industry at a White House QOZ summit and hosted out first-ever IPAForum specifically on QOZs in Dallas. We’re also working on a comment letter that aims to bring additional clarity around QOZs as viable investment options for clients and will testify at the upcoming Treasury hearing in July.

Can you provide an update on some of the IPA’s current advocacy priorities and what AltsEDGE attendees can expect on the topic at the event?

This year marks an unprecedented opportunity to engage policymakers on Capitol Hill following the mid-term elections. The IPA is actively engaged on a range of legislative and regulatory priorities, including the SEC’s push toward Regulation Best Interest, an expansion of the accredited investor definition and support for a healthy and safe private investment market.

Recently at our IPA Summit & Hill Day, we continued to strengthen relationships with the SEC, FINRA and NASAA through direct dialogue – and that has continued in follow-up meetings with leadership at NASAA and FINRA since the event. In partnership with our members, we’re working hard to break down old barriers and educate our regulatory partners about the evolution of PDI investments. It is critically important to create sustainable dialogue and make a positive impact on the regulatory environment in which our businesses operate.

At AltsEdge specifically, attendees will have the chance to hear from Valerie Mirko, General Counsel, NASAA. She’ll offer unique insights and regulatory updates from NASAA, focusing on state-registered investment advisers and uniformity between SEC and state regulatory approaches. And Anya Coverman, IPA’s SVP, Government Affairs and General Counsel, will brief attendees on a broad range of advocacy initiatives that the IPA is driving on behalf of its members.

IPA’s WIN Forum comes right on the heels of AltsEDGE on June 19. Why is this event important, and what can attendees expect from the broad spectrum of women leaders who will be speaking to the various topics on the agenda? 

The IPA Women’s Initiatives Network (WIN), and specifically the WIN Forum, is dedicated to a primary objective: advancing diversity and inclusion across the financial services community. This is the seventh year we’ve hosted the event, and the momentum and spirit of the initiative has been incredible.

We’re seeing thriving and purpose-driven diversity initiatives make a positive impact at so many of our member firms. And importantly, we know that the success of these initiatives has a direct correlation to the success of the company overall. So, attendees can expect to hear from other members of the IPA community who are on the front-edge of these trends, leading their company’s diversity initiatives. Attendees will come away with practical ideas on leading positive changes at their own organization, no matter how big or how small the company may be.

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