When you work with a broker, you can expect to pay a certain amount in transactional fees and charges, most of which can be split into two categories: commission or markup for a specific trade and miscellaneous fees for account maintenance and other expenses. The commission fees are typically self-explanatory, but Marin County attorneys warn clients to pay strict attention to the miscellaneous fees they may be charged monthly or annually.
What is a Miscellaneous Fee?
A “miscellaneous” fee could cover any number of charges—postage and handling fees, maintenance or administrative servicing fees, transfer fees, execution facility fees, office overhead charges, third-party charges, supervision fees and more. These costs are assessed to reimburse your broker for any expenses he or she may have incurred while working on your account, either performing a transaction or offering a service to you.
Any fees that are assessed as service charges must be disclosed in a written notice provided by your broker when you open your account. If additional service charges are being assessed, or your fee schedule is being changed, the broker should provide that notice in writing at least 30 days before the changes take place.
Check Your Statements
After each transaction is made, your broker must provide you with a confirmation statement. This statement will include the commission or markup charged, as well as the fees you may have paid for this transaction. Sometimes, the fees will be listed separately with an explanation for each charge, but in other cases, you may see a lump sum on the confirmation statement. When the fees are not separated, you can request a breakdown from your broker.
Fees can have an impact on your securities investments, and could even reduce the returns you see over time. Because of this, your broker has a responsibility to charge only what is fair and reasonable when handling your investments. This may vary, based on the circumstances surrounding your transaction and the broker you work with.
What to Do If You Suspect Fraud
There are a number of federal agencies that regulate what brokers and securities advisors are and are not allowed to do, including the U.S. Securities and Exchange Commission (SEC), the Financial Regulatory Authority (FINRA), and the North American Securities Administrators Association (NASAA). These groups ensure that all investors are treated fairly by their brokers and keep fees and costs from reaching exorbitant amounts aimed to take advantage of consumers. If you suspect your broker has been fraudulently billing you, your securities fraud lawyer will work with you to contact these agencies and start an investigation.
At the Evans Law Firm, Inc. our securities fraud lawyers urge clients to play an active role in their investments and be aware of the fees being charged, as well as what each fee is for. If a charge or fee is suspicious, or if your brokerage firm refuses to provide you with more information about your fee schedule, contact one of our attorneys right away. You can reach us online at www.evanslaw.com or by phone at 415.441.8669.