SEC settles with adviser over failure to consider account aggregation requests in applying fee breakpoint discounts

Purpose – To review SEC enforcement action taken against an adviser over: failure to grant advisory fee breakpoint discounts based on the aggregation of related accounts requested by clients and related deficiencies in the adviser’s administration of the account aggregation feature. Design/methodology/approach – Review and summarize the SEC’s finding’s regarding the adviser’s advisory fee breakpoint discount program, deficiencies in the program identified in SEC examinations, resulting violations of the Investment Advisers Act and its rules, the adviser’s remedial efforts and undertakings, and the sanctions imposed. Findings – This settlement provides an important reminder for registered investment advisers of the need to fully address deficiencies identified in SEC examinations and of the attention paid by SEC inspection staff to client fees as a core examination area. Originality/value – Practical explanation from experienced financial services lawyers.