Voluntary Guidelines Help Investors Understand and Compare Miscellaneous Broker-Dealer Fees

WASHINGTON, D.C. (May 9, 2017) — The North American Securities Administrators Association (NASAA) announced that nine additional securities firms have agreed to provide to their clients a fee disclosure schedule based on a model developed by NASAA’s Model Fee Disclosure Working Group.

NASAA President and Minnesota Commissioner of Commerce Mike Rothman commended the following firms for agreeing to use the NASAA model Fee Disclosure Schedule: Fidelity Investments; Prudential Financial, Inc.; 1st Global; Cambridge Investment Research Inc.; Commonwealth Financial Network; FSC Securities Corp.; Royal Alliance Associates Inc.; SagePoint Financial Inc. and Woodbury Financial Services Inc.

The addition of these firms brings to 13 the number of firms using fee schedules based on the NASAA Model Fee Disclosure Schedule. The other firms are: LPL Financial LLC, Morgan Stanley Smith Barney LLC, Prospera Financial Services, and Signator Investors, Inc.

The NASAA Model Fee Disclosure Schedule helps investors better understand and compare various broker-dealer miscellaneous account and service fees and to provide guidelines to make fee disclosure accessible and transparent. The working group’s goal is to develop meaningful account and service fee disclosure and transparency. They must be simple to read, easily accessible and helpful for retail investors to understand and compare fees.

“This collaborative initiative between regulators and industry helps increase the transparency of fee disclosure for investors,” said Mike Rothman, NASAA President and Minnesota Commissioner of Commerce. “I commend all firms that have taken the initiative to help bring uniformity to the disclosure of broker-dealer service and maintenance-related fees and I encourage the implementation of this sound business practice to others to provide the same level of disclosure to their clients.”

The Working Group consisted of state securities regulators, representatives of the Financial Industry Regulatory Authority (FINRA), the Securities Industry and Financial Markets Association (SIFMA), the Financial Services Institute (FSI), LPL Financial LLC, Morgan Stanley Smith Barney LLC, Prospera Financial Services, and Signator Investors, Inc.

The group was formed in 2014 following the release of a study by NASAA’s Broker-Dealer Section uncovering a wide disparity in how broker-dealers disclose the fees they charge customers. In 2015, NASAA released the results of a national opinion research poll that found investor confusion about the fees charged by brokerage firms to service and maintain their accounts. Additional information is available on NASAA’s Model Fee Disclosure Resource Center.

NASAA is the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the provinces and territories of Canada, and Mexico. For more information, visit: www.nasaa.org.

For More Information:
Bob Webster | Director of Communications
202-737-0900