Advocis president and CEO, Steve Howard is defending the role of advisors involved with hedge fund Portus Alternative Asset Management Inc..

“We take strong objection to the implication that advisors who referred their clients to Portus funds were only motivated by lucrative referral fees and the further notion that all advisors act outside of a client’s best interests,” noted Howard in a statement released late last week. “Financial advisors were as taken by surprise as were many large manufacturers and distributors in this situation.”

Advcois notes that the question of responsibility needs to be examined as regulators, product manufacturers and advisors are all involved in presenting investment products to consumers. It adds that advisors need to be able to rely on the soundness of the information that is provided to them by product manufacturers.

The advisor association also points a finger at the regulators. “The fundamental problem is the patchwork of advisor regulation and oversight,” Howard said. “Solution seeking in the Portus case leads to more well intentioned, but misguided, focus on over-regulation which does not solve the consumers’ problem. It does not provide clarity in determining who is qualified to deliver advice nor does it provide clarity between the role of advice and product regulation sorely lacking today.”

“The industry also needs to look at what approval processes are in place to allow consumers to purchase high risk products like hedge funds,” he added. “We believe that it is unbecoming of participants who had a material role in approving Portus funds for sale to the public to now look to blame advisors for the deficiencies of Portus’ management of those funds.”