What must investment advisers disclose regarding their fees?

Investment advisers are required to provide comprehensive and transparent disclosures regarding their fees and expenses to ensure that clients have a complete understanding of the costs involved in their services. The correct response emphasizes the importance of disclosing all fees and expenses with clear explanations, which enables clients to make informed decisions about their investments.

This approach aligns with regulatory requirements, such as those set forth by the Securities and Exchange Commission (SEC) and the fiduciary duty that advisers owe to their clients. Comprehensive disclosure helps to promote transparency, mitigate potential conflicts of interest, and foster trust between the adviser and the client.

Clear explanations of all fees ensure that clients know exactly what they are paying for, whether it is management fees, performance fees, or any other associated costs. This level of detail is essential because it allows clients to compare offerings from different advisers effectively and understand how these fees impact their overall investment returns.