Fenwick & West securities enforcement co-chair Mike Dicke was prominently featured in an Ignites article discussing the Securities and Exchange Commission’s 2015 updated list of examination priorities.
The article reports that the SEC is taking a hard look at the growing number of financial professionals who work with retail investors operating as investment advisors or dually-registered investment advisors and broker-dealers, for which they use a variety of fee structures. A focus of the SEC in this regard, according to the article, is whether the recommendation of account types by the advisor, including fees charged and services provided, is in the best interest of the client and whether the advisor has disclosed his or her dual role.
“It’s a very hot issue,” said Dicke, who is a former associate regional director for enforcement in the SEC’s San Francisco office. He added that from an enforcement perspective, determining whether a transaction-based fee or fixed fee is better for different types of investors will be complex for the commission to decide.
Dicke also pointed to a new item on the SEC’s 2015 list, proxy services. In addition to examining how proxy advisory service firms make recommendations on proxy voting, the article notes, the SEC will also be targeting the firms’ compliance with their fiduciary duty of voting proxies and beefing up their disclosure responsibilities.