SEC Risk Alert – Frequent Advisory Fee and Expense Compliance Issues

April 13, 2018

On April 12, 2018, the Office of Compliance Inspections and Examinations (“OCIE”) of U.S. Securities and Exchange Commission (“SEC”) released a Risk Alert, “Overview of the Most Frequent Advisory Fee and Expense Compliance Issues Identified in Examinations of Investment Advisers.” The risk alert provides a list of compliance issues frequently identified in OCIE examination deficiency letters  relating to fees and expenses charged by SEC registered investment advisers.  Click here to read the SEC’s Risk Alert.

The most frequent deficiencies identified pertaining to investment adviser fees and expenses are:

  • Fee-Billing Based on Incorrect Account Valuations
  • Billing Fees in Advance or with Improper Frequency
  • Applying Incorrect Fee Rate
  • Omitting Rebates and Applying Discounts Incorrectly
  • Disclosure Issues Involving Advisory Fees
  • Adviser Expense Misallocations

RIA Compliance Consultants encourages investment advisors to review their practices, policies, and procedures to ensure compliance with their advisory agreements and disclosures made to clients. If your investment advisor firm needs assistance reviewing its policies and procedures, RIA Compliance Consultants can help. Contact your consultant or click here to schedule an introductory call.

Posted by Grant Parr
Labels: Risk Alert, SEC, Uncategorized