Advisors would be required to update the fee table annually and would deliver the fee table to clients prior to or at the time of signing the advisory contract.
“The finance industry is in the midst of transformational change. Industry and regulatory leadership is key to investor protection especially during this time,” said Rostad, who in his letter to Galvin flagged feedback from the SEC’s own Investor Roundtables as proof investors need more information on the actual fees and commissions they’re paid.
Some 41 percent of investors at the SEC’s largest investor roundtable in Houston in June, 2018 expressed dissatisfaction with the agency’s Form CRS, Rostad said.
As one investor asked SEC regulators at that meeting:
“How are you going to be able to put fee information into that form to a degree that it has any meaning? For example, those of us who have brokerage agreements with large brokerages, they may have hundreds of different fund families that each have their own individual fees. And all I can see…is, ‘fund families may have additional fees.’”