“SEC Identifies Top 6 Investment Advisory Fee and Expense Compliance Issues for Investment Advisers”
On April 12, 2018, the Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission (SEC) issued a Risk Alert highlighting the most frequent advisory fee and expense compliance issues identified in its examinations of investment advisers (advisers) during the past two years. The Risk Alert serves as a reminder to the industry that advisory fees and expenses remain a focal point of the SEC’s oversight of registered investment advisers.
This Stroock Special Bulletin sets forth the six most frequent compliance risks and issues related to advisory fees and expenses identified by the OCIE staff. In light of the fee and expense issues noted in the Risk Alert and this Stroock Special Bulletin, advisers are encouraged to review their practices, policies and procedures to ensure they are in compliance with their advisory agreements, operating agreements, disclosure materials and other representations to clients. This assessment should be conducted both internally and in conjunction with experienced outside counsel.