Which condition is NOT required for a program to qualify for the Safe Harbor Rule?

The Safe Harbor Rule is designed to provide a level of protection for investment advisers under certain conditions. One key aspect of this rule is that it outlines specific requirements that firms must meet to benefit from the presumed compliance.

In this context, the condition relating to "mandatory annual fees for all clients" is not one of the necessary requirements for a program to qualify for the Safe Harbor Rule. The Safe Harbor aims to ensure advisors meet specific disclosure, reporting, and consent requirements, but it does not mandate that all clients must pay annual fees. Fees are a separate consideration that may vary based on the advisory relationship, the services provided, and the specific agreement between the adviser and the client.

The other conditions—annual contact to confirm no changes, provision of quarterly statements, and the ability to impose reasonable restrictions on investments—are essential to demonstrate ongoing communication, transparency, and responsiveness to client needs, all of which are foundational to maintaining fiduciary standards and regulatory compliance under the Safe Harbor provisions.