Self-Directed IRA-color

A Quick FAQ on the Fiduciary Rule

The Department of Labor’s Fiduciary Rule—which has been delayed until July 1, 2019—is meant to ensure that transparency becomes general principle across the board. It also signals that educated consumers want a more transparent, data-driven process.

Level the Playing Field

The new rule aims to make all advisers play by the same rules, at least for retirement accounts. The new protections seem like common sense business practices:

  • Give practical advice when making investment recommendations
  • Put customers’ interests first when making recommendations
  • Avoid misleading or confusing language about fees, investments, and conflicts of interest
  • Adhere to the best interest standard and exclude financial incentives for advice that is not in the customer’s best interest
  • Charge reasonable compensation for services

A Few Questions Answered

Why did the Labor Department adopt the rule?

To protect people who are saving for retirement from unscrupulous investment advice.

How does the rule make change in the financial services industry?

The new Fiduciary Rule makes best interest advice the law. In many instances, financial advisers must give you a written statement that they are fiduciaries when they offer investment advice. They must disclose any information about conflicts of interest in any payments they get.

Will the rule better protect my retirement savings?

According to the DOL it will. Your adviser must provide impartial investment advice that is in your best interest and he/she cannot accept any payments that would cause conflicts of interest.

Which financial advisers are fiduciaries under the Rule?

Generally under the Rule, a fiduciary is someone, usually a financial adviser, who is paid for giving investment advice, a recommendation about your retirement accounts, your retirement account rollovers, based on your particular needs. To clarify, general investment or financial education is not considered fiduciary advice.

What loopholes are being closed by the Rule?

Prior to the Rule, many advisers received financial incentives for steering customers to products that weren’t necessarily in the customers’ best interest. Now they must be.

Do you have any questions? Speak with an Investor Relations Representative.

Articles or information from third-party sources outside of this domain may discuss KBSDirect.com or relate to information contained herein, but KBSDirect.com does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party content, do not constitute an approval or endorsement by KBSDirect.com or NCPS of the linked or reproduced content.

KBS Direct makes no representations as to the appropriateness of an investment in KBS Growth & Income REIT for ERISA plan fiduciaries and IRA owners and no investment advice is being provided.  ERISA plan fiduciaries and IRA owners should consult with counsel before making an investment in the REIT’s shares.

Business success concept

KBS: Twenty-Five Years of Undiluted Expertise

KBS is one of the country’s foremost commercial real estate owners and operators, with over $34 billion* in transactional volume since it was founded in 1992. KBS was ranked by National Real Estate Investor as one of the largest commercial real estate companies in the U.S in 2016. It also happens to be the sponsor of KBSDirect.com.

The culture at KBS is centered around real estate. It’s our passion, it’s what drives us, it’s what we’re focused on,” says Clint Copulos, KBS Senior Vice President and Asset Manager of Portland’s Commonwealth building.

“Where other companies have acquisition officers and asset managers that are working side by side to go out and buy real estate and execute business plans, KBS has market leaders. And those market leaders are focused on a specific market from the beginning of the process to the end. They acquire the asset, execute the business plan, and see it through; so there’s accountability, developing and building relationships, and there’s a real sense of ownership.”

Undiluted expertise in real estate

This undiluted strength in real estate began with the company’s inception. “Peter Bren and I wanted to have people who had extensive real estate expertise,” says Chuck Schreiber, KBS CEO. “We didn’t hire people who had degrees in economics or other areas thinking that we could teach them real estate. We wanted people who had hands-on real estate experience.”

Every one of KBS regional presidents and asset managers have one to three areas of real estate on which they focus: development, construction, retail properties, multi-family properties, industrial or office properties.

“When we gather together, we have some of the sharpest professionals in the country on our team helping us make decisions on assets within our portfolio.”

Even the accounting and reporting teams have real estate expertise. “We’re all focused on the real estate we buy, operate, and ultimately, sell.”

The fundamentals of people at KBS are real estate experience, a very high level of integrity, and a passion for the investor.

Schreiber continues, “We do what we say we’re going to do and we don’t make commitments until we’re highly confident we can perform under those terms. We [build teams] that really have a passion for the investor. This isn’t high-risk, high-return objective money that somebody’s willing to lose. We’re dealing with people’s retirement money so this is of the utmost importance. We want to ensure that everyone within KBS has that passion and respect for our investors’ money because they are responsible for managing that money and investing it in real estate.”

Great buildings, great tenants

KBS started the shift to high quality office real estate in 2010-2011. “A large percentage of our portfolio and the majority of our efforts, is high-quality office space. We found that great tenants are attracted to great buildings.”

Even if the property is the most expensive in the marketplace, or perhaps even partly because of it, the building “attracts high-end tenants who want to be in beautiful buildings. They want employees to have an inspiring environment in which to work and also to be proud of their location,” says Schreiber.

This strategy combined with the breadth of KBS’ experience, is what creates their innovation. “We don’t stand still in anything, we’re always looking for a better way to perform a transaction, whether it’s an acquisition, disposition, or creative financing,” says Jim Chiboucas, KBS Vice Chairman and Chief Legal Officer. “We constantly look for ways to get better terms for our investors.”

Lewis Feldman, KBSDirect Chief Strategy Officer, has been and continues to be involved with online and direct investment companies as an advisor. “Scale, scope, and quality distinguish KBS Direct above all the other sites on the internet today where you can find and access direct investments. No one else has the professional management and this high level of expertise. With KBS Direct you have institutional quality, real estate professional management and scale like never before.”

Do you have any questions? Speak with an Investor Relations Representative.

Keep in mind there are risks to investing, including loss of capital.

*Presented by calendar year for the period 1993 through June 30, 2017. Includes equity investments in, and real estate-related debt investments secured by, real property assets, real property assets acquired through foreclosure, all consolidated joint venture investments and unconsolidated joint venture investments in which KBS owned or owns a majority interest, but excludes unconsolidated joint venture investments in which KBS did not or does not own a majority interest. Consolidated joint venture investments and unconsolidated joint venture investments in which KBS owned or owns a majority interest are shown at 100% of the respective purchase and/or sales price. Includes the following properties for which third-party asset managers unaffiliated with a KBS advisor provide asset management services, business and operation plans and other services: 867 bank branches, office buildings, operations centers and other properties; apartment and hotel properties; and an unconsolidated joint venture investment in which KBS owns a majority interest.

Articles or information from third-party sources outside of this domain may discuss KBSDirect.com or relate to information contained herein, but KBSDirect.com does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party content, do not constitute an approval or endorsement by KBSDirect.com or NCPS of the linked or reproduced content.

Commonwealth-Bldg-JoshPartee-3006

At the Core of KBS Direct: Transparency

Institutional-quality commercial real estate investment is usually an exclusive club roped off to individual investors—until now. KBS, one of the largest, most trusted names in commercial real estate, with approximately $34 billion* in transactional volume since inception, has launched KBSDirect.com, a new online investment platform.

“As the regulations changed and the industry changed, there was a need for an even better product; one that allows investors to invest directly with complete transparency. With KBS’ institutional background, experience, track record and the technological infrastructures that were coming into place, we realized we could create a gold standard, different from everybody else. So, we developed KBSDirect.com,” said Jim Chiboucas, KBS Vice Chairman and Chief Legal Officer.

Informed investors

Lewis Feldman, KBSDirect.com’s Chief Strategy Officer, emphasized that the quality of the investment asset is first, and the online process is second—but it’s still important.

“The online experience has to reflect the transparency of management and I think that’s really the key in the user experience [and is] fundamentally important. At KBSDirect, [we crafted] a user experience that educates and makes sure that someone has learned what they need to learn about the area and the investment before they invest.”

“[We make] sure that we have informed investors and that registered investment advisors who are recommending these securities can feel that they are doing their fiduciary duty and are aligned with their investor and with KBS for everybody’s success.”

Foundation of transparency

“We are investor-centric,” said Mr. Chiboucas. “Before we make any decisions or do anything we typically ask two questions: how does this help the investor? How is this going to increase investor returns? Because if the decision doesn’t do that, what’s the point?”  

Mr. Schreiber, has expanded on that, attributing KBS transparency and method to examining the element of risk.

  • KBS assesses the risk at the time of acquisition.
  • KBS buys assets “in areas where we have appreciation, not only in cash flow but appreciation in value.”
  • KBS identifies the time when “we can sell that asset and develop realized returns for that investment.”

“The investment market has changed drastically over the last 20 years and for retail investors, over the last 15 years,” said Mr. Schreiber. “It’s promising to find that investors are well-educated thanks to the available materials online. As a result, we’re giving those educated investors the opportunity to invest in a high-quality portfolio in a structure that they’ve never been able to pursue previously. And we’re excited about this because I don’t think it has been done before.”

Do you have any questions? Speak with an Investor Relations Representative.

 

*Presented by calendar year for the period 1993 through June 30, 2017. Includes equity investments in, and real estate-related debt investments secured by, real property assets, real property assets acquired through foreclosure, all consolidated joint venture investments and unconsolidated joint venture investments in which KBS owned or owns a majority interest, but excludes unconsolidated joint venture investments in which KBS did not or does not own a majority interest. Consolidated joint venture investments and unconsolidated joint venture investments in which KBS owned or owns a majority interest are shown at 100% of the respective purchase and/or sales price. Includes the following properties for which third-party asset managers unaffiliated with a KBS advisor provide asset management services, business and operation plans and other services: 867 bank branches, office buildings, operations centers and other properties; apartment and hotel properties; and an unconsolidated joint venture investment in which KBS owns a majority interest.

Articles or information from third-party sources outside of this domain may discuss KBSDirect.com or relate to information contained herein, but KBSDirect.com does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party content, do not constitute an approval or endorsement by KBSDirect.com or NCPS of the linked or reproduced content.