“If you have a blizzard of advertising, it’s going to be much more difficult for people to do due diligence,” said Philip H. Harris, a partner at the law firm Skadden, Arps, Slate, Meagher & Flom.

Still, some say a new advertising climate would change little about the way individuals look at so-called alternative investments.

“It’s always been a buyer beware scenario,” said Irwin Latner, a partner at the law firm Herrick, Feinstein.

Whether they like it or not, hedge funds and private equity firms have increasingly been in the spotlight, facing unwanted government scrutiny and their own investors clamoring for more transparency. In response, the industry has been rapidly institutionalizing, tossing aside its freewheeling culture for large operations with top-notch compliance teams.

“This is one more step in the direction the industry is headed,” Jay Gould, a partner at the law firm Pillsbury, said of the new provision.

The final rules would be written by the Securities and Exchange Commission within 90 days of the bill’s signing. A lot could change through the process, including just how broadly the hedge funds can market themselves. But there is little argument in the industry that the move is a much-needed update to the current regulations.

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