NEWS RELEASE FROM THE TEXAS STATE SECURITIES BOARD
April 8, 2015
Contact: Robert Elder, Communications, (512) 305-8386
WASHINGTON, D.C. – New research from the North American Securities
Administrators Association (NASAA) finds investors are confused when it comes
to the fees charged by brokerage firms to service and maintain their accounts.
“Greater transparency and improved disclosure would allow investors to
quickly and easily compare prices, products and firms,” said William Beatty,
Washington Securities Director and president of NASAA. “While broker-dealers
may be complying with the technical requirements governing fee disclosures, our
research shows that improvements are needed to raise awareness among investors
of the costs associated with their brokerage accounts.”
Commissioned by NASAA, the independent research firm ORC International
conducted a public opinion poll by surveying 1,072 investors with a brokerage
account across the continental United States by telephone from January 8-25,
2015. Respondents answered questions about their awareness of service and maintenance fees charged by
brokerages and how fee disclosure could be improved.
Highlights of the findings include:
- Brokerages routinely charge fees to serve and
maintain brokerage accounts, yet 30% of investors mistakenly believe their firm
had no such charges and 25% indicated they did not know whether they were being
charged in addition to investment commissions.
- Of the investors who know they are being charged,
more than half (52%) indicated that they did not know the amount they pay in
fees to serve and maintain their account.
- Of all investors surveyed, 71% indicated that they
did not know the amount of additional service and maintenance fees their
brokerage firm charges for services they might need in the future, such as
transferring their account to a different brokerage or obtaining documents from
their brokerage.
- 81% said the amount of
fees they pay for services and account maintenance over the lifetime of their
account is important to them.
- 79% of investors said they would like their brokerage
firm to provide a separate chart that lists its service and maintenance fees in
a format that is simple to read and understand, and 65% would prefer a direct
link on their brokerage firm’s website to a chart of service and maintenance
fees.
- 88% of investors would like to see brokerage firms
use standardized and uncomplicated terms to describe service and maintenance
fees in order to help compare fees between different firms.
The investor survey was conducted following the release last year of a study by NASAA uncovering a wide disparity in how broker-dealers
disclose the fees they charge customers and questionable practices regarding
broker-dealer fee charges and markups.
The Texas State Securities Board is a member of NASAA, the
non-profit association of state, provincial, and territorial securities
regulators in the United States, Canada, and Mexico.
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