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Good Risk Governance Pays

Investment Best Practices | Risk Management | Valuation

Category Archives: Fees

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It’s Heeeere – The Fiduciary Rule Has Arrived – Now What?

Posted in Compliance, Disclosure and Transparency, ERISA, Fees, Fiduciary Liability, Governance, Investment Management, Mutual Funds, Regulation
Like most people who work in the financial services arena, I hastily downloaded the long anticipated “Fiduciary Rule” when it was released by the U.S. Department of Labor (“DOL”) on April 6, 2016 and am busy tackling this final version. With more than two hundred pages, it’s going to take longer than a lunch break but is nevertheless vital reading. DOL’s Fact… Continue Reading

Tradeoff Between Lower Hedge Fund Fees and Longer Lock Ups

Posted in Fees, Hedge Fund, Liquidity
As I’ve written many times, assessing whether a product or strategy makes sense for a particular investor (whether individual or institutional) depends on facts and circumstances. At a minimum, one has to consider what an investor seeks to accomplish, relevant constraints, need for liquidity, overall risk tolerance and the risk-return profile of the product or strategy. Costs… Continue Reading

Investment Transparency Now Required in Rhode Island

Posted in Disclosure and Transparency, Fees, Hedge Fund, Investment Management, Pension
Just a few days after the U.S. Securities and Exchange Commission (“SEC”) voted to officially propose that certain registered funds provide a lot more information about their operations, the State of Rhode Island has followed suit. In a May 26, 2015 press release, General Treasurer Seth Magaziner describes the Ocean State as a leader in… Continue Reading

Excessive Fee Litigation and Public Pension Plans

Posted in Disclosure and Transparency, Fees, Investment Management, Pension, Private Equity, Susan Mangiero
Having just returned from a two-day ERISA litigation conference in Chicago, the topic of fee benchmarking is top of mind. During a rousing session about excessive fee allegations, plaintiffs’ counsel Greg Porter (partner with Bailey Glasser LLP) and defense counsel Eric S. Mattson (parter with Sidley Austin LLP) discussed fiduciary litigation, the Exclusive Benefit Rule,… Continue Reading

Investment Fees and Portfolio Returns

Posted in Disclosure and Transparency, ERISA, Fees, Investment Management, Mutual Funds, Pension, Regulation
Although Whole Foods is one of my favorite grocery stores, I experienced sticker shock today when I bought fresh fish from Stop n’ Shop. Wild flounder at the former recently cost me $14.99 per pound in contrast to $7.99 at the latter. When I asked for comments, I was told that organic status might account… Continue Reading

Fiduciary Regulations, Financial Literacy and the Cost of Compliance

Posted in Broker Dealers, Compliance, Fees, Fiduciary Liability, FINRA, Investment Management, Regulation
As financial industry participants know, once the regulatory machine is in motion, it is difficult to go back to the beginning. At a certain stage, those organizations and individuals that are expected to be on the receiving end of new rules spend money and time to prepare. According to “Fiduciary rules will cost millions in… Continue Reading

Making Sense of Mutual Fund Fees

Posted in Fees, Mutual Funds
Following the ruling in Gartenberg v. Merrill Lynch Asset Management, many people look to the six factors discussed therein in determining the reasonableness of fund fees. To recap, the Gartenberg factors are listed below: Nature and quality of services rendered; Profitability of fund to the advisor; Scale considerations that impact the cost of managing a fund;… Continue Reading

ERISA Pension Plans: Due Diligence for Hedge Funds and Private Equity Funds

Posted in Compliance, ERISA, Fees, Financial Expert, Fraud, Governance, Hedge Fund, Litigation, Pension, Private Equity, Risk Management, Valuation
Join me on May 1, 2012 for a timely and interesting program about alternative investment fund due diligence and other considerations for ERISA plan sponsors, their counsel and consultants. Click here for more information. This CLE webinar will provide ERISA and asset management counsel with a review of effective due diligence practices by institutional investors. Best practices… Continue Reading

New Litigation Risks For Retirement Plan Providers

Posted in Disclosure and Transparency, ERISA, Fees, Pension, Regulation
According to Shannon Barrett, attorney and partner in O’Melveny & Myers’ ERISA litigation practice, new fee disclosure regulations could mean more lawsuits against record-keepers and other organizations that provide services to U.S retirement plans. Cited in “New Fee-Disclosure Regs Pose New Litigation Risks for Retirement Plan Providers” by Fran Lysiak (Insurance News Net, March 2,… Continue Reading