The Wall Street Journal-20080206-SEC Dusts Off Online Plan For Brochures of Advisers
Return to: The_Wall_Street_Journal-20080206
SEC Dusts Off Online Plan For Brochures of Advisers
Full Text (350 words)WASHINGTON -- The Securities and Exchange Commission will consider a long-delayed plan that would require investment advisers to provide online brochures describing their services, fees and investment performance in an easy-to-read narrative.
A public announcement hasn't been made yet but the issue will be on the agenda for an SEC public meeting next Wednesday, according to individuals familiar with the matter who agreed to speak anonymously.
The SEC first called for expanded online disclosure in 2000 but retreated, requiring advisers to provide electronic filings of basic information only, leaving details in printed brochures. Although SEC officials promised to revisit the topic, it went to the back burner as the agency's staff's attention was diverted to a rash of mutual-fund trading scandals.
"They've been talking about this for years," said Barry Barbash, former head of the SEC's investment-management division and a partner at the Washington law firm of Willkie, Farr & Gallagher. He declined to predict how a revised plan might be received, saying, "the devil's in the details on this one."
Changes are long overdue, according to Duane Thompson, a managing director at the Financial Planning Association, a Washington nonprofit organization. While investors get written information from investment advisers, Mr. Thompson said the product is a thick, intimidating document that "is largely useless and unread."
A simpler online brochure would benefit investors by giving them an easy way to find advisers and do side-by-side comparisons based on factors such as price and performance, said Wisconsin securities administrator Patricia Struck.
"I think this will be a huge advance," said Ms. Struck, who chairs the investment-adviser section for the North American Securities Administrators Association. "People are going to use the content more because it's in a friendlier format."
Ms. Struck said the SEC's 2000 rule requiring investment advisers to provide basic information through a fill-in-the-box format has been successful, giving regulators and investors online access to an adviser's name, address, phone number and any prior disciplinary history.
Advisers supply the information to the Investment Adviser Registration Depository, an electronic database operated by the Financial Industry Regulatory Authority, a self-regulatory organization for brokers.
