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

February 7, 2018

Executive Summary

  • The Massachusetts Securities Division (“Division”) is seeking preliminary comments on a proposed regulation that would require investment advisers who are registered with the Division to create a fee table for advisory clients.
  • The proposed fee table is intended to increase transparency, aid comprehension of advisory fees, and enable comparison shopping of investment advisers.
  • The fee table would be delivered to current and prospective advisory clients and included on an investment adviser’s website, if applicable.
  • Please review the entirety of the fee table proposal and see the below questions soliciting public comments. Comments may be submitted by clicking the “Submit a Comment” button below or by emailing securitiesregs-comments@sec.state.ma.us.

The entirety of the Division’s proposed fee table can be accessed by clicking the below PDF attachment.

Fee Table Summary and Instructions (PDF)

Questions for Public Comment

To facilitate the Division’s assessment of the proposed fee table, an email box is now available for members of the public to make their views on these issues known publicly in advance of a formal regulation proposal. The Division welcomes public views on the following questions, as well as other information the public believes to be relevant in consideration of the fee table. For each comment that responds to one of the below questions, provide an explanation of your comment.

  • Please comment on the potential for investor confusion caused by new advisory fee models. Could this confusion be best addressed through the fee table or would you suggest other methods? If you would suggest other methods, explain your suggestions.
  • Do the proposed fee table column titles and permissible categories of services provide investment advisers with adequate flexibility to describe their fees and services? If not, provide suggestions of how this could be accomplished.
  • For investment advisers that have several fee models depending on the services provided to a client, would the proposed fee table be readily understandable to clients? If not, provide suggestions of how to accomplish this goal. Should an investment adviser create multiple fee tables if it uses more than one fee model?
  • If an investment adviser’s advisory fee includes the fees of sub-advisors within it, how should investment advisers disclose the advisory fees of these third party money managers and robo-advisers to clients? If third party advisory fees are charged separately to the client by a third party money manager, should these fees be disclosed by the state-registered investment adviser? Explain why or why not.
  • How should additional fees charged by parties other than the investment adviser, such as mutual fund fees or trading costs, be disclosed? The proposed fee table does not include third party commissions or costs. Should commissions, mark-ups or brokerage fees of the client’s custodian be included in the proposed fee table? If not, why?
  • The proposed fee table includes a field for total fees. Are advisers able to readily disclose the total fees for their services? Would the total fee disclosure be understandable to consumers?
  • For investment advisers who charge fees based on a percentage of assets-under-management, how should the fee table distinguish between advisers who provide financial planning services and those who provide only portfolio management services? How should the fee table distinguish between investment advisers who create a one-time financial plan in comparison to those who provide ongoing financial planning services?
  • Please comment on the proposed fee table’s costs, benefits and economic effects on investment advisers. Would the proposed regulation be unduly burdensome for state-registered investment advisers to implement? Approximately how much time and cost would an investment adviser incur to create the proposed fee table?

To the extent that your comment responds to one of the above questions, please state the question before your response. The Division will post all comments without change and persons submitting comments are cautioned to submit only information that they wish to make publicly available. Comments may be submitted by clicking the “Submit a Comment” button below or by emailing securitiesregs-comments@sec.state.ma.us. If you have questions about the proposed fee table, you may contact Carol Anne Foehl, Esq. at 617-727-3548.

Submit a Comment

 


Public Comments

May 9, 2018 - Stephan Shipe, PhD

April 7, 2018 - Michael Kitces, Publisher, Nerd’s Eye View at Kitces.com, Co-Founder, XY Planning Network

March 26, 2018 - Stephen Neumeier

March 21, 2018 - Financial Services Institute (FSI)

March 7, 2018 - John R. Power

March 4, 2018 - Carroll W. Hayes, Jr.,

February 24, 2018 - Anthony Salotto

February 20, 2018 - Susan Burns

February 16, 2018 - Andrew Simms

February 7, 2018 - Valerie Haggerty

February 7, 2018 - Ted Wolfstich

February 7, 2018 - Steve Stanganelli

February 7, 2018 - Richard J. Carlesco Jr.

February 7, 2018 - Michael F. Greco

February 7, 2018 - Edward Lane

February 7, 2018 - Victoria M Lechner

February 7, 2018 - Alan Friedberg

February 7, 2018 - David McLaughlin

February 7, 2018 - Eric W. Bright

February 7, 2018 - Ousmane Diagne

February 7, 2018 - Ernest Giacobba

February 7, 2018 - Brian Foley