On 13 October 2022, the SEC published a single FAQ confirming that, under its fiduciary duty, an investment adviser can recommend or select other advisors using factors such as diversity, equity, and inclusion (DEI), provided that the use of those factors is consistent with the client’s objectives, the scope of the relationship, and the adviser’s disclosures.
The FAQ further adds that the adviser’s duty is not restricted by a selected adviser’s track record or assets under management.
Similarities may be drawn to Europe where sustainability preferences are factored into investor profiling in advice or discretionary management.
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