• Cost of Proposed User Fees by Registered Investment Advisers Further Discussed
  • October 3, 2014 | Authors: Peter D. Fetzer; Terry D. Nelson
  • Law Firms: Foley & Lardner LLP - Milwaukee Office ; Foley & Lardner LLP - Madison Office
  • As most of our readers are aware, there has been a proposal advocated by various parties, including certain members of Congress, that a funding source to pay for the increase of SEC examinations over registered investment advisers be provided by imposing user fees on registered advisers. You probably wonder, if such proposals are placed into law, what the typical adviser would have to pay for its portion of the user fees.

    According to a recent study authorized by Congress, the typical SEC examination of an investment adviser costs about $27,000 and the estimated annual cost for registered advisers for the user-fee funded examinations would be about $310 million. However, it is estimated that a majority of the 32,000 registered advisers may not have to pay any user fee due to the manner in which user-fees would be levied per registrant. It is assumed that the SEC would levy an annual user fee on those advisers with a higher than average amount of assets under management.

    The study helps to put some numbers behind the costs of the increased number of examinations and possible user fee costs for the registrants. More information about the consultant’s study results may be found online.