Colorado Advisor’s Interval Fund Concentrations Drew Scrutiny Over Senior Clients

The central concern in Colorado’s case against financial advisor Andy Hahn was the scale of clients’ exposure to Interval funds. In a September consent order, the Colorado Securities Commissioner said approximately 40% of accounts at Hahn Financial Services were at or near 100% invested in these funds during the period examined. Close to half of those high-allocation accounts were entirely concentrated in a single Interval fund at some point, and many belonged to senior or elderly investors.

Those figures make this a question of portfolio construction as much as product selection. Interval funds can hold investments that are harder to sell quickly than publicly traded stocks or bonds. They offer investors limited opportunities, or “intervals,” to sell shares back to the fund. That structure can make the timing and amount of an investor’s access to cash less flexible than with conventional mutual funds or exchange-traded funds. The funds’ limited redemption opportunities are especially relevant when a client may need money on short notice.

Hahn’s firm, Hahn Financial Services, is based in Canon City, Colorado. Its Form ADV lists $16.1 million under management for 113 clients. Hahn has worked in the securities industry since 1985. The consent order, signed by Colorado Securities Commissioner Tung Chan on September 17, describes the firm’s sales of Interval funds and the examination findings that led to the order.

Concentration and access to cash

According to the order, Hahn recommended that clients hold unusually high allocations to the funds. In some cases, an account was fully invested in one Interval fund. A concentrated position can leave a client with fewer sources of liquidity if an unexpected expense arises or if the investment’s redemption terms limit when shares can be sold. That concern can carry particular weight for older investors, who may need ready access to savings for expenses such as an extended hospital stay.

The order names four recommended investments: the Apollo Diversified Credit Fund, the Cliffwater Corporate Lending Fund, the CIM Real Assets and Credit Fund, and the Apollo Diversified Real Estate Fund. The products span credit and real estate strategies, but the order’s account-level figures point to a shared issue: the degree to which some clients’ portfolios depended on investments with limited liquidity.

Interval funds are not interchangeable with ordinary stock or bond funds. Their structure can restrict how often investors can request redemptions, and the amount available to redeem may also be limited. That means an investor’s ability to exit may depend on the fund’s stated terms and the timing of the request. For an advisor, the practical question is how those terms fit each client’s time horizon, cash needs and overall portfolio. The order’s reported allocations put that fit under scrutiny.

Earlier compliance concerns

The Colorado Securities Commissioner’s office had examined Hahn Financial Services before the Interval fund matter. The order says the firm received deficiency letters in 2021 and 2024 concerning industry requirements and standards for client information used to support investment recommendations. Those records matter because a recommendation depends in part on understanding a client’s circumstances. If that information is incomplete or poorly documented, it becomes harder to assess whether a large allocation is appropriate for a particular person.

Hahn did not return calls seeking comment, according to the source report. Under the consent order, he agreed to hire a compliance consultant for the firm. The available details describe that condition and the examination findings; they do not provide a fuller account of Hahn’s response to the concerns.

Interval funds and other semi-liquid or illiquid products also tend to cost more than plain-vanilla stock or bond mutual funds and exchange-traded funds. The source report says they are typically two to three times more expensive. Fees can weigh on returns over time, while limited liquidity can affect when investors can access their money. Those features make the size of an allocation consequential: an investor fully concentrated in one such fund faces a different set of trade-offs from someone holding a modest position alongside more liquid assets.

A wider lesson for advisory firms

The concern echoes questions that surfaced after the 2007 and 2008 financial crisis, when some advisors placed clients heavily in expensive, higher-risk alternative investments. Such sales practices became less visible over the following years, but the Colorado case shows why product labels alone don’t settle the suitability question. A fund’s strategy, redemption terms, costs and portfolio role all need to be considered alongside a client’s circumstances.

Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services, said that advisors who own their firms should take their responsibilities to clients seriously. He described managing client money as a “sacred trust” and said he was surprised by the outcome’s relative leniency.

For clients and advisory firms, the account-level detail is the clearest signal in the order: approximately 40% of the firm’s accounts were near or at full allocation to Interval funds, while 45% of those high-allocation accounts reached 100% concentration in one fund. The next questions are whether the compliance consultant’s work changes how recommendations are documented and whether clients’ liquidity needs and fund concentrations receive closer review.