State-Registered Advisers Find Discrepancies Between States on Fee Model Regulation

Posted on October 25th, 2017 at 10:04 AM
State-Registered Advisers Find Discrepancies Between States on Fee Model Regulation

From the Desk of Jim Eccleston at Eccleston Law LLC:

According to financial industry experts, new financial advisers are having difficulty navigating the discrepancies between states in terms of the way regulators are allowing them to charge their clients’ fees for services.

Unethical business practice rules can be confusing to new advisers because there are a wide variety of state rules. For instance, Utah outlaws fees based on net worth, whereas other states allow the combination of fees based on net worth and flat fees. Moreover, other states prohibit the combination of fees based on net worth and flat fees, and require an adviser to pick one or the other.

According to a InvestmentNews 2016 Financial Performance Study, 44% of advisers set prices based on flat or tiered-dollar fees, 28% only charge hourly, and 26% have a per project fee.

In order to make it easier for advisers, industry professionals are encouraging the North American Securities Administrators Association (NASAA) to develop a model rule in an effort to make the industry more uniform in the area of fee model regulation.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial advisors including Broker Litigation & ArbitrationStrategic Consulting ServicesRegulatory  MattersTransition Contract Review, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: Jim Eccleston, Eccleston Law, Eccleston Law LLC, Eccleston, financial, advisers

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Thank you for your professional assistance with this matter. You are very good at what you do.

John T.


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