Excerpt: The Securities and Exchange Commission ("SEC") has made a concerted effort over the last several years to address investment advisers' conflicts of interests and to establish standards for associated disclosure failures (unfortunately) through a series of settled enforcement actions. Many of these enforcement actions have focused on insufficient conflict disclosures regarding mutual fund share class selection, and the failure by advisers to use in wrap programs or otherwise the least expensive mutual fund share class for which the client or program is eligible, ostensibly so that the adviser or its broker-dealer affiliate could collect Rule 12b-1 fees.
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Originally published in the Compliance Corner section of the July 2018 IAA Newsletter.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
