- November 22, 2021
- Posted by: giawatkins
- Category: SEC
The SEC recently announced its Division of Examinations Observations: Investment Advisers’ Fee Calculations. The notice is expressly described as a follow-up to its 2018 Risk Alert. It highlights the importance of this topic with citations and guidance resulting from the focused examination of 130 firms referenced as the Advisory Fee Initiative.
The key warning to advisers is that fee calculations and related disclosures in the Form ADV and Client Agreement should not be considered as operational or administrative in nature, but in connection with their fiduciary duties. The report covers a wide variety of topics from the perspective of not only notable exam deficiencies, but also of industry practices that assist Advisers with compliance. As usual, the SEC confirms there is not a “one size fits all” solution.
CFI has assisted Firms and Outside Counsel in connection with investment adviser fee issues in connection with exam deficiencies and related enforcement matters. We also assist firms with proactive reviews in validating accurate fee billing implementation, coupled with enhancements. We bring the experience of former Compliance, Legal and Advisory Fee professionals to this area. In connection with our data analytics, we have developed templates that incorporate firm data inputs with vendors’ fee billing formulas – both critical for timely and well executed audits.
Contact us to see how we can assist.
November 10, 2021: https://www.sec.gov/files/exams-risk-alert-fee-calculations.pdf
April 12, 2018 : https://www.sec.gov/files/ocie-risk-alert-advisory-fee-expense-compliance.pdf