Massachusetts proposed a one-page advisor fee disclosure requirement today that is designed to help investors make more informed decisions about costs when they comparison-shop investment advisors.

The new, proposed stand-alone fee table—which advisors would need to deliver to existing and prospective clients—is designed to increase transparency of advisory fees and costs by distilling the information into a simple, digestible format that enables side-by-side comparison, said William F. Galvin, Massachusetts’s secretary of the commonwealth, in a statement announcing the proposal today.

The new fee table responds to industry pricing innovations, many fueled by fintech, Galvin said.

Today, he said, “it is no longer the case that advisors simply charge their clients a fee for assets under management. It is not uncommon for consumers to pay different types of fees for advisory services, including retainer fees, subscription fees and third-party robo-advisor fees.”

“The fee table that my Securities Division is proposing is intended to address these new fee models by increasing transparency. The table is also intended to make fees and costs more understandable and to enable investors and savers to make informed comparisons between investment advisors,” he continued.

The agency will hold a public hearing to receive testimony on the proposed change on May 2 in Boston. The deadline for written comments on the fee table is May 3.

In many ways, the Massachusetts one-page fee table beats the Securities and Exchange Commission to the proverbial punch. The SEC has proposed a four-page customer disclosure, which is the centerpiece of its “best interest” proposals to improve investors’ comprehension when they are selecting advisors. But the disclosure has been shown to increase investor confusion instead, according to several nationwide surveys and studies.

“The Massachusetts proposal could be enormously helpful and a great first step in meeting at least half of what investors say they want from their disclosures—greater clarity and transparency about their advisor’s fees and conflicts of interest,” said Knut Rostad, a former chief compliance officer and the founder and president of the Institute for the Fiduciary Standard.

Currently only advisors, not brokers, would be required to use the proposed one-page fee table. That leaves “lots of grey area about what is happening in the trenches” with dually registered advisors and what they do when they take off their advisor hat to work as brokers.

“One important piece of this will be hopefully to raise investor expectations,” Rostad said. “Once it becomes known and expected that this one-page document is available on the RIA side, what will brokers do when they’re asked for a fee table?”

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