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SEC Exam Sweep Shows Advisers Overcharging Clients

November 11, 2021

InvestmentNews shares that in a separate exam sweep, the SEC found that Robo-advisers weren’t acting in clients’ best interests and were misleading in their advertising.

In the two Risk Alerts published this week, advisers have a lot to unpack and ensure they are not falling into these shortcomings identified by the SEC. Alan Foxman, Managing Director at Foreside, shared his interpretations of the alerts and says advisers are getting more creative in how they are paid, which creates compliance challenges.

“The more complicated you make things, the more detailed and clearer your disclosures need to be so clients can figure out how they’re being charged,” Foxman said.

Click here to learn more about the litany of compliance problems firms need to be aware of.