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Regulators Focusing on Improved Disclosure of Broker Fees

Yesterday the National American Securities Association announced that it has formed a working group meant to improve broker-dealer fee disclosures.

Back in April, the NASAA released a report that found a “wide disparity” in the way broker-dealers disclose their fees to customers, along with “questionable practices regarding broker-dealer fee charges and mark-ups”. The report raised concerns about the “transparency and reasonableness of broker-dealer fee practices”.

Broker-dealers may comply with technical requirements for fee disclosures, but those disclosures aren’t effective when they lost in small print: “Fees hidden within pages of impenetrable verbiage is not meaningful fee disclosure”. The report found that disclosures lack uniformity and ranged from one paragraph to seven pages.

Now, the NASAA will work with industry regulators to “achieve a more meaningful disclosure” of fees. The joint working group’s goal will be a “model fee disclosure that is simple to read, easily accessible, and can be used effectively”.

To read the news release in its entirety, click on the following link:


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