The SEC's Office of Compliance Inspections and Examinations published a risk alert outlining the most common compliance issues relating to advisory fees and expenses its staff encountered during their examinations. The most frequently identified deficiencies included:
- Fee-billing based on incorrect account valuations;
- Billing fees in advance or with improper frequency;
- Applying the incorrect fee rate;
- Omitting rebates and incorrectly applying discounts;
- Disclosure issues involving advisory fees; and
- Adviser expense misallocations.
OCIE encouraged advisers to review their practices, policies and procedures to ensure compliance with their advisory agreements and representations to clients regarding fees and expenses made in Form ADV and other disclosures.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
