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

Return to Archive



Thank You from the bottom of our hearts for all you have done for us. When we realized this was a very bad investment - we did not know where to turn for help. Then we received your name. When we called you - you were so kind to us and then agreed to help us. For this we are so very grateful. The world would be a much nicer place if there were more people like the two of you in it. We will always remember all the help and kindness you have shown us. Thank you so very very much for everything.

Wayne and Judy S.


October 20, 2021
5 First-of-Their-Kind SEC Enforcement Actions Announced

Securities and Exchange Commission (SEC) Enforcement Director Gurbir Grewal recently discussed notable first-of-their-kind enforcement actions that his division has pursued.

October 19, 2021
FINRA Targets SPACs in Most Recent Exam Sweep

The Financial Industry Regulatory Authority (FINRA) has begun an examination sweep of advisors’ involvement with special purpose acquisition companies (SPACs).

October 18, 2021
SEC’s Statement on Complex Exchange-Traded Products

The Securities and Exchange Commission (SEC) recently voted to approve a pair of rule changes proposed by Cboe BZX Exchange, Inc. to list and trade shares of new exchange traded-products: the 2x Long VIX Futures ETC and the -1x Short VIX Futures ETF.