Gifts and Entertainment: What You Can (and Can’t) Accept

For Registered Investment Advisers (RIAs), the line between relationship-building and potential conflicts of interest can get blurry—especially when gifts or entertainment are involved.

Regulators scrutinize these areas closely because even well-intentioned gestures can raise red flags about impartiality, fiduciary duty, or undue influence.Here’s how to stay compliant while navigating the nuances of giving and receiving gifts or entertainment.

🎁 What Qualifies as a “Gift” or “Entertainment”?

- Gifts** include tangible items such as holiday baskets, wine, gift cards, or branded merchandise. 

- Entertainment** includes meals, tickets to sporting or cultural events, golf outings, or travel perks.

Whether you’re giving or receiving, the key question is: Could this reasonably be viewed as an attempt to influence decision-making or business judgment?

⚖️ Regulatory Expectations

While the Investment Advisers Act doesn’t impose strict dollar limits, regulators expect firms to:

- Maintain written policies and procedures 

- Monitor and record gifts and entertainment 

- Avoid any activity that creates a conflict of interest or appearance of impropriety 

- Disclose relevant gifts or benefits in Form ADV if they rise to the level of a material conflictSome states or specific firms may impose stricter internal limits (e.g., $100 per individual per year).

🚫 What You Can’t Do

- Accept cash or cash equivalents (like prepaid cards) 

- Receive extravagant or frequent gifts from vendors, clients, or brokers 

- Provide entertainment that lacks a clear business purpose 

- Participate in quid pro quo arrangements 

- Allow gifts to influence recommendations, allocations, or vendor choices

✅ Best Practices for Compliance

1. Set Reasonable Limits

- Common threshold: $100–$250 annually per giver/recipient    

- Track both giving and receiving

2. Require Pre-Approval for High-Value Items    

- Have a process for supervisory review of anything above the set limit

3. Maintain a Central Gifts and Entertainment Log

- Record recipient/donor, date, value, and business purpose    

- Review periodically for patterns or risks

4. Train Employees    

- Include examples and scenarios in compliance training    

- Emphasize zero-tolerance for any appearance of bribery or favoritism

5. Update Policies Annually

- Reflect evolving practices, thresholds, and regulatory guidance

🧾 Disclosure Considerations

If a gift, benefit, or entertainment results in a material conflict of interest—or is part of a revenue-sharing, solicitation, or referral arrangement—it may need to be disclosed in your Form ADV.

Check with your compliance counsel if there’s any doubt.

Final Thoughts

Building professional relationships is part of doing business—but so is protecting your firm’s integrity. Clear policies, consistent documentation, and a culture of ethical awareness go a long way in keeping your RIA compliant.

When in doubt, ask: Would I be comfortable explaining this gift or event to a regulator—or a client?

If the answer is no, it’s best to politely decline.