SEC settles with adviser over failure to consider account aggregation requests in applying fee breakpoint discounts

Abstract

Purpose

To review SEC enforcement action taken against an adviser over: failure to grant advisory fee breakpoint discounts based on the aggregation of related accounts requested by clients and related deficiencies in the adviser’s administration of the account aggregation feature.

Design/methodology/approach

Review and summarize the SEC’s finding’s regarding the adviser’s advisory fee breakpoint discount program, deficiencies in the program identified in SEC examinations, resulting violations of the Investment Advisers Act and its rules, the adviser’s remedial efforts and undertakings, and the sanctions imposed.

Findings

This settlement provides an important reminder for registered investment advisers of the need to fully address deficiencies identified in SEC examinations and of the attention paid by SEC inspection staff to client fees as a core examination area.

Originality/value

Practical explanation from experienced financial services lawyers.

Citation

Galloway, J. and Griffin, N. (2014), "SEC settles with adviser over failure to consider account aggregation requests in applying fee breakpoint discounts", Journal of Investment Compliance, Vol. 15 No. 3, pp. 32-34. https://doi.org/10.1108/JOIC-07-2014-0028