Preliminary Request for Public Comment on Proposed Fee Table for State-Registered Investment Advisers

February 7, 2018 - David McLaughlin

Subject: Fee Table comment
From: David McLaughlin
February 7, 2018

In response to the idea of a fee table the following comments are submitted:

  1. There is a wide variation in the skill sets and experience levels of financial planners and investment advisors
  2. Planners are not experts in every field
  3. There is a relationship factor between a client and the planner which involves many intangible factors
  4. Every client has a different set of circumstances and complexity
  5. Fees should be clearly identified in the contract that the client reviews and signs with the advisor
  6. The services should be clearly defined in the contract that the client reviews and signs with the advisor
  7. In our practice we have standard rates but based on the above factors and the amount of funds to be managed they can and often are negotiated a fee table cannot reflect this.
  8. Selecting an advisor based on fees would be a mistake for the average client. These are professional services not a commodity. There are too many factors that go into the determination of value for fee to be listed on a chart.
  9. Having a special requirement for one State is difficult to administer when RIA’s have clients in multiple States. What if each State had a separate fee format. This is overly complicated for an investor.
  10. Massachusetts should work with the SEC and FINRA to modify the ADV Part II for this type of situation. We already provide basic information on fees in that document along with service descriptions. Any changes that are made should be made to the ADV Part II so that the presentation is uniform in all States.
  11. Fiduciary does not always equate to lowest cost……it should be best service to meet the clients goals with cost as one of many factors.

Question…….If you had to have open heart surgery, would you select your surgeon based solely on a fee table?
I hope you will act on Item #10 above, consistent regulations and disclosures are needed so that all clients can benefit.

Respectfully submitted,
David McLaughlin CFP®
Nutfield Financial Services, Ltd.