Clients of investment advisers registered with Massachusetts should be prepared to start seeing a new regulatory document. Beginning on January 1, 2020, Massachusetts investment advisory firms are required to provide a stand-alone fee table document highlighting all fees that clients can expect to be charged.
The new stand-alone fee table will be provided to all new and potential clients of the adviser, as well as provided to existing clients on an annual basis and whenever the table is updated. It will also be required to be posted on the adviser’s web site. There is no new information on the table; it is simply a re-formatted carve-out of existing material contained in the Form ADV Part 2 Items 4 and 5.
The federal regulator, the U.S. Securities and Exchange Commission (SEC), and no other state requires this so it is unique to Massachusetts. The form is designed as a template for all advisory forms to fill out. Because it is a template, it should be easy to compare Massachusetts advisers with each other, but not so easy to compare with SEC-registered or other state-registered advisers. Interestingly, for advisers registered in Massachusetts with a principal place of business outside of Massachusetts, the table is only required for clients who are Massachusetts residents.