On April 12, 2018, the SEC’s Office of Compliance Inspections and Examinations issued a risk alert listing the most common compliance issues concerning fees and expenses charged by SEC-registered investment advisers. Advisers should review their practices, policies and procedures to ensure compliance with their advisory agreements and representations to clients in light of the fee and expense issues noted in the risk alert.
Here are the top six:
- Fee-Billing Based on Incorrect Account Valuations.
- Billing Fees in Advance or with Improper Frequency.
- Applying Incorrect Fee Rates.
- Omitting Rebates and Applying Discounts Incorrectly.
- Disclosure Issues Involving Advisory Fees.
- Adviser Expense Misallocations.
For additional guidance, please read our full client alert on this topic.