“On the advisor said, we’re seeing all sorts of new fee models and none are bad or good, they’re just different, so we’ve worked on guidance that basically talks about whatever fee you charge, it has to be reasonable to services you provide,” Hartnett said.
“There is nothing concerning about different fee models. The question is the same thing that it is for all fees: Is the fee appropriate for services rendered? As we see new fees come about, that for us is the question. As long as the services are rendered and the fees are appropriate, just about any fee model is great,” he added.
Under Harnett, the organization has also taken on the Financial Industry Regulatory Authority (FINRA) over its proposal to reclassify brokers’ home offices as “remote supervisory locations,” which would enable the self regulator to do exams once every three years instead of annually.
“Our concern is that with more people working remotely, that heightens the importance of the supervisory function and our ability to use those exams to make sure that nothing untoward is happening. We don’t want to be in the position where we don’t know what we don’t know,” he added.
“Supervisory offices should continue to be visited with the same frequency as they are currently because the importance of their work has not changed, and because firms need to understand how well supervisors are adapting to technological surveillance methods,” Hartnett said in a Nov. 25 comment letter to Finra on the proposal.
While Finra attempts to make increased use of virtual technology, there are things that technology will miss, which would be found with in-person audits, Hartnett added.