August 21, 2025
SALT LAKE CITY, UT—The Utah Department of Commerce’s Division of Securities announced a modification to its guidance for registered investment adviser (RIA) firms regarding reasonable hourly fees. Effective immediately, RIA firms may set hourly rates they deem reasonable based upon their experience and expertise, with the Division maintaining its statutory authority to seek sanctions against RIA firms that charge unreasonable fees.
Historically, the Division had set the maximum reasonable rate for RIA firms at $275 per hour, requiring RIA firms that wanted to charge a higher rate to justify to the Division the justification for charging a higher rate. Division Director Robert B. Cummings explained the justification for the change: “The Division of Securities has conducted a multi-year review of the policy and it appears that Utah’s RIAs were at a disadvantage in setting their rates based upon policies and guidance from the Securities and Exchange Commission and the states surrounding Utah.”
The Division will still vigorously enforce laws and rules against RIA firms charging unreasonable fees. “The guidance change should, however, have minimal impact on investors as the vast majority of RIAs set rates based upon a percentage of assets under management,” according to Director Cummings. “RIAs that charge hourly fees are generally doing so based upon ancillary services provided to their clients, such as general financial planning. Therefore, the Division of Securities adjusted its reasonable fee guidance to reflect this economic reality and to empower Utah’s RIAs to set competitive rates based upon general market dynamics.”
“For investors, we encourage you to ask your investment advisors for a fee disclosure and specifically ask how they set the price,” Director Cummings advised, “and for an explanation about how the investment advisor will bill you for services provided.” “We encourage everyone to fully vet and research anyone who will be handling your money,” he concluded.
Key Changes and What They Mean for Firms
- Flexibility in Fee Setting: As of August 7th, 2025 the Division’s guidance regarding setting reasonable fees is that an hourly rate of $275 is generally reasonable based upon current market information, but RIA firms still need to justify any rate they set, be it above $275 or less, based upon specific experience and expertise, among other relevant factors.
- Continued Fiduciary Duty: Firms must still adhere to their fiduciary duty to act in their clients’ best interests. This includes ensuring all fees, regardless of how they are structured, are reasonable in relation to the services provided.
- Increased Scrutiny in Examinations: Going forward, the Division will place greater emphasis on fee analysis during post-licensing compliance examinations. This includes a review of documentation, fees and related disclosures, and consistency in pricing across clients.
- No Change to Existing Regulations: The core legal framework guiding these decisions remains unchanged. Charging an unreasonable advisory fee is still considered a dishonest or unethical business practice under Utah law, and is subject to disciplinary action.
This change is designed to provide greater flexibility for RIA firms, especially those that offer specialized or complex services, without compromising the Division’s commitment to protecting investors from unreasonable costs.
Learn more about the change here.
