Worth the Fee: The Ethics of Advisory Fees and Billing

About the course

The advisory fee is the one place where your interest and your client’s always point in opposite directions. Most clients never check the bill, and most could not check it if they tried. That makes the way a fee is set, explained, calculated, and collected a test of honesty that comes around every billing period. This beginner-level course explains the subject in plain language and assumes no prior training. It starts with the ways advisers are paid and the conflict each one creates, then covers what the SEC’s fiduciary interpretation, Form ADV, the custody rules, and the NASAA model rules require. It shows what goes wrong: wrong rates, missed breakpoints and household discounts, prepaid fees that are never refunded, fees on cash and dormant accounts, and compensation the client was not told about. Worked examples show the arithmetic. The final module gives you five questions to ask in any fee situation and applies them to four case studies. A glossary and a rule reference table are included. The course is written for the individual IAR, because the person most likely to notice a billing problem is the one who knows what the client was promised.