Due to a recent rule change, SEC-registered investment advisers' full Forms ADV are now publicly available online. Before the change Part 2 of an SEC-registered investment adviser's Form ADV was not required to be publicly available online. Importantly, an adviser's fee schedule appears in Part 2.
As a result of the rule change investors and investors' consultants may now more easily "comparison shop" prospective and incumbent advisers based on cost.
An Investment News article about the change is available here. (Free registration required.) The article explains the change and explores possible competition-enhancing consequences.
Rick Ferri of Portfolio Solutions LLC is quoted in the news article. Portfolio Solutions LLC specializes in creating balanced portfolios of low-cost index funds. (By the way, Rick writes an excellent blog under the tag-line "Lower Your Investment Costs." A link to the blog is available here. I first became aware of Rick when reading his blog posts that also appear as his contributed updates to LinkedIn's Vanguard Networking Group.)
Rick's points in the Investment News article include that the new public availability of fee schedules gives low cost adviser firms like his a new competitive advantage and may facilitate ranking of adviser firms by fee schedules in addition to rankings based on conventional measures such as assets under management. One suspects Rick believes a ranking by fees would be a good thing. Agreed.
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