Strategy Neutral Policy

Policymakers Should be Strategy Neutral


Investors should have access to a full range of investment strategies to meet their goals. The economic and investment landscape evolves continually and often rapidly. Investment advisers serve a wide range of clients with unique financial situations and goals. Fiduciary investment advisers must have the flexibility to make decisions and consider factors that they, in their expert judgment, reasonably believe advance the best interests of their clients as they strive to help their clients reach their goals.

 For that reason,  laws and regulations should not explicitly or implicitly favor one investment strategy over another or, in effect, select investments or strategies for clients.  Such actions create a high risk of unintended and adverse consequences for investors, including making it more difficult for an adviser to invest in the most prudent investment option for a particular client or type of client, based on the adviser’s expert assessment and its client’s specific goals.

The IAA supports policies that are strategy neutral.  We generally object to policies  that impose limits on the investment opportunities and other tools available to fiduciary investment professionals to seek to achieve their clients’ goals. In particular, the IAA opposes :

  • Actions that make it more difficult and expensive for fiduciaries to vote proxies in the best interests of their clients.
  • Policies that explicitly or implicitly favor passive management strategies over active strategies. There is broad agreement among experts that both active and passive strategies – and everything in between – have valuable and important roles to play in investment management in the best interest of clients and the markets.
  • Actions designed to, or that have the effect of, limiting an adviser’s ability to consider factors, including environmental, social, and/or governance (ESG) factors, that they reasonably believe will achieve desired investor outcomes.
  • Mandates that would require consideration of factors an adviser believes will not achieve the client’s goals.

The IAA will continue to engage with policymakers  to ensure that laws and regulations do not reflect a bias in favor of one strategy over another, that have the effect of limiting the tools available to an adviser, or that otherwise undermine an adviser’s ability to exercise expert fiduciary judgment.