Investors are confused about the fees charged by brokerage firms to service and maintain their accounts, with 30% of investors mistakenly believing that their BD levies no such charges, according to a just-released report commissioned by the North American Securities Administrators Association.
The just-released report, "Investor Confusion About Brokerage Service & Maintenance Fees," was conducted via telephone from Jan. 8 to 25 by the independent research firm ORC International. It surveyed 1,072 investors with a brokerage account across the continental United States regarding their awareness of service and maintenance fees charged by brokerages over the lifetime of an account.
The research "shows that investors are confused and unaware of how much their brokerage firm charges to serve and maintain their investment accounts," said William Beatty, Washington securities director and president of NASAA, in releasing the research. "Investors tell us fees are important and they want to see improved disclosure."
While brokerages routinely charge fees to serve and maintain brokerage accounts, nearly one-third (30%) of investors mistakenly believe their firm had no such charges and one-quarter (25%) indicated they did not know whether they were being charged in addition to investment commissions, the report found.
What's more, of the investors who knew they are being charged, more than half (52%) indicated that they did not know the amount they pay in fees to serve and maintain their account.
