Hi, The AMC (asset manager code), states that with respect to fees, must disclose/estimate the average or expected expense/fees that a client will likely incur. In the CFAI text, there is an example where the fees are disclosed in %, and I thought that this would be close enough, but I got the question wrong. does this mean that the fees must be stated in dollars? Book states “Manager’s must disclose to prospective client the avergae or expected expenses or fees clainet are likely to incurr.” So if a potential clinet says he has a 1mill port to invest, and I say fees are 2% of AUm, and we take 20% of profits, is this not clear enough? We arent supposed to assume that the client will figure out the 2% of AUM? (AUM = Asset under mgmt) Thanks!!!
anyone?
You should both disclose the fee schedule/mechanism AND state clearly what it means sth like 'Our client should expect to pay between 1% and 1.5% of average invested assets per year in total for…"
thanks!
hi, sbmfj tell me the CFAI page & question #,please. i want to check it out. thanks!