A new analysis from the North American Securities Administrators Association (NASAA) reveals that many firms still fail to comply with Regulation Best Interest (Reg BI) requirements when recommending non-traded real estate investment trusts to clients. 

Examiners discovered that some firms heavily relied on pre-Reg BI suitability policies. However, most firms had updated their policies to align with obligations. Nearly all examined firms restricted non-traded REIT sales based on factors such as a client's age, risk profile, liquidity needs, and time-horizon, although they were more inclined to have limitations rather than outright sales prohibitions, as reported by WealthManagement.com. 

Likewise, firms usually established net income and net worth standards and concentration limits for private placement recommendations and sales. All firms analyzed under the report complied with federal laws that prohibit private placement sales to non-accredited investors. 

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