The Securities and Exchange Commission, is examining whether asset managers that recommend and funnel money to hedge funds are acting in investors' best interest.

This is important to you if you've got money managed by someone else. If you're a client, you can't easily verify performance and fees if your money manager doesn't tell you how your money is invested.

The SEC, which is stepping up its oversight of investment advisers, has asked the money managers for information about their "due diligence" in selecting investments such as hedge funds, private equity and venture-capital funds, according to a letter from the SEC's Office of Compliance Inspections and Examinations.

The SEC created a specialized group last year to watch over asset managers. The SEC also wants to know how money managers market their funds, and whether they signed confidentiality agreements with those they invest in, according to the letter.

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