# kaal:claim:2337268-042

**Claim.** The IAA bars compensation tied to the performance of the client's account but permits compensation tied to the average value of the client's assets, so fee regulation targets performance linkage rather than asset based fees.

**Type.** condition  **Support.** asserted

**Holds when.**

- fee arrangements in advisory contracts under the IAA

**Source quote.**

> It also prohibits performance-based compensation if the adviser's fee is linked to the performance of the client's account.110 The IAA does, however, allow investment advisers to tie their compensation to the average value of the client's assets.111

**From.** Wulf A. Kaal, *Investment Adviser Regulation* (2013), 10. Fees, page 22

**Cite as.** Wulf A. Kaal, Investment Adviser Regulation (2013). SSRN: https://ssrn.com/abstract=2337268

**Verify.** sha256 of source PDF `7075ce35282a8ee75b81ae3dec0e19f68631beae7f3c3a00ab2827538dc9e302` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202013%20-%20Investment%20Adviser%20Regulation.pdf

**Topics.** private-funds

**Keywords.** performance-fees, advisory-fees, asset-based-compensation, investment-advisers-act

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