02.24.21
State Regulators Probe Whether Investors Get Money’s Worth From Subscription Fees
by: Mark Schoeff
The North American Securities Administrators Association is planning to release guidance sometime this year on subscription fees and how they are used by investment advisors. Maryland Securities Commissioner Melanie Lubin said recently, “There are a lot of evolving fee models that we’re taking a look at. It’s kind of fundamental that an advisor, as a fiduciary, needs to perform the work they’re being paid for, and if they’re not performing that work, they need to refund the monies.” The scrutiny comes as subscription fees have become popular tools in the industry. They are viewed as an alternative to the traditional fee based on assets under management. Barbara Roper, director of investor protection at the Consumer Federation of America, says the fee model shouldn't be singled out. She says, "We need to be sure that when we’re looking at this one particular business model, we’re equally willing to challenge some of our assumptions about the other business models." Lubin adds that it is important that fees are reasonably priced for the service being provided.
Read the full article on InvestmentNews.