compensation disclosures for Investment advisor per 408b

[Jim Chad]

I think I am getting a pretty good handle on what needs to be disclosed as far as compensation for the TPA (me) and the CPA doing the audit on large plans. But I have almost no information on what needs to be disclosed as far as comp for the investment adviser and the investment company. Are the prospectuses sufficient?

[Bird]

Where I am the advisor I generally provide a detailed description of the payout to my broker/dealer (in percentage terms) and the contractual share that flows on to me, including a negotiated extra share. It's probably more than is necessary but I think it's only fair.

I don't think the prospectus or platform service agreement is adequate, because it just says how much goes to the broker-dealer. The broker could get less than 50% to 90% (maybe even more) of the gross payout. I guess I should say it doesn't seem adequate in what I see as the spirit of the law. Honestly, I don't know.

If I'm not the broker I tell (told) the client about the requirement and said (literally) "it's not my problem." I gave the brokers a heads-up and washed my hands of it; it's not the client's problem either; they are the ones who are to receive the disclosure.

[Jim Chad]

It's been a few days. Any additional thoughts, anyone?