How RIAs should overhaul billing after another SEC warning about fees
November 16, 2021 by Tobias Salinger
If RIAs didn’t pay attention last time the SEC came through looking for information about their fees, the regulator’s latest warning should make them take notice, compliance experts said.
A new sweep by the regulator’s Division of Examinations revealed widespread problems with how much RIAs charge clients and the manner that they disclose the expenses, despite the SEC’s listing of fees as an examination priority in each of the past four years and more than 150 enforcement cases. Most RIAs out of about 130 SEC-registered firms receiving audits are making errors in the calculation of advisory fees, failing to give clients discounts or credits or leaving pertinent information out of their required disclosures, according to the Nov. 10 risk alert.