New FINRA rules regarding nontraded REITs have some advisors crying off this investment. The rule requires advisers to report the actual value of those investments – less commissions to their clients, a practice many had avoided. Several experts view nontraded REITs as a money-maker for the advisor but not the client, as there is no way to establish a value until there is an event such as a sale or purchase. Others claim that these real estate investments help stabilize the client’s portfolio because their value doesn’t fluctuate as much as bonds. Hugh Berkson, president of PIABA, finds these arguments to be false. The new rules will likely result in lower commissions on REITs, a situation many believe is in the best interests of investors.
Hugh Berkson is a Securities Attorney with McCarthy, Lebit, Crystal & Liffman, Co. LPA with over 20 years of representing individuals who have lost money due to the negligence of investors and brokers.
Hugh is a past President of the Public Investors Arbitration Bar Association (PIABA), an international legal association composed of practitioners who represent investors in disputes with the securities industry. He was also just re-elected to PIABA’s Board of Directors, where he has served as a director since 2011.
