A new investor alert from the U.S. Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy warns investors about the miscellaneous fees charged by some brokerage firms.
The SEC issued a bulletin Monday alerting investors to the sorts of fees that may be charged by brokers in addition to typical, commissions, account fees, and trade markups. These fees may include postage and handling charges, administrative service fees, clearing and transfer fees, execution facility fees, office overhead fees, supervision fees or third-party charges.
The alert reminds investors that these sorts of fees and other costs can have a “significant impact” on their returns.
Brokers’ fees are required to be fair and reasonable, the SEC notes; adding, that regulators have found firms charging fees that are excessive, or unwarranted. It also advises investors to shop around and seek competitive fees.
The alert indicates that brokers are required to provide written notice to customers of all service charges when accounts are opened, and must be given 30 days notice before any changes are implemented.