Recently, FINRA issued an alert regarding “alternative” funds. FINRA points out the key differences between “alternative” funds and the more conventional stocks and bonds.
A few points from FINRA on alternative funds:
Investment Structure: An alternative fund of funds may offer greater diversification than a single-strategy or even multi-strategy alt fund. At the same time, this greater diversification may lead to a flattening of return and potentially less transparency.
Strategy Risk Factors: In addition to the usual market- and investment-specific risks mutual funds have, alt funds carry risks from the strategies they use.
Investment Objectives: One fund might be designed to capitalize on management expertise in a specific area, while another might seek exposure to commodities, currencies and other alternative investments.
Operating Expenses: Alternative mutual funds can be pricey relative to their traditional managed fund peers; the average annual operating expense is around 1.5 percent per year.
Fund Manager: Learn as much as you can about the fund manager, such as how long he or she has managed the fund. FINRA recommends that the investor research the professional background of a fund manager using FINRA's BrokerCheck.
Performance History: Many alternative funds have limited performance histories. Many were launched after 2008, so it is not known how they might perform in a down market.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, represents clients nationwide before FINRA. If you or a loved one have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses: 888-760-6552.
Pending customer claims on BrokerCheck name Michael Graham (CRD 3263494) and list LPL Financial as the firm. Each claim is pending and unproven, and no arbitrator has ruled on any of them. The customers allege that Graham misrepresented guaranteed principal and returns on a secured loan related to a real estate deal.
An SEC decision involving Titan Securities (CRD 131392) of Plano, Texas became final on August 7, 2026, according to FINRA's October 2026 Disciplinary and Other FINRA Actions report. The decision fined the firm $50,000. The record lists the firm as JTA Securities Management, Inc. dba Titan Securities.
Every settled customer dispute on Peter Maller's BrokerCheck report names Lincoln Financial as the firm. Maller holds CRD number 2322403. The newest dispute, filed on March 5, 2024, settled on August 15, 2024 for $12,500 against alleged damages of $50,000. The claimants alleged that the representative represented an oil and gas investment as safe.
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