Annual fee disclosures are a regulatory obligation under the Investment Advisers Act of 1940, but they're also an opportunity. A well-written fee disclosure letter doesn't just satisfy compliance — it reinforces your value, builds transparency, and reduces the likelihood of fee-related disputes or complaints.
Registered investment advisors are required to deliver or offer to deliver their Form ADV Part 2A annually, within 120 days of fiscal year-end. Key fee disclosures include:
Most fee disclosure letters read like legal boilerplate. That's a missed opportunity. Consider structuring your annual fee letter to include a brief summary of what you delivered over the past year — key portfolio decisions, planning work completed, tax savings identified, or rebalancing actions taken. This turns a compliance obligation into a concrete demonstration of value.
The best fee disclosure letters answer the unspoken client question: "Am I getting what I'm paying for?"
Compliance Note: Under SEC rules, RIAs must deliver (or offer to deliver) their updated ADV Part 2A within 120 days of the end of the fiscal year. If your brochure has material changes, you must deliver it (not just offer). Keep records of delivery — use email delivery with read receipts or certified mail for documentation. Consult your compliance consultant for your specific delivery obligations.
[Date]
[Client Full Name]
[Client Address]
[City, State, ZIP]
Dear [Client First Name],
As required by our regulatory obligations and in keeping with our commitment to transparency, I'm writing to provide your annual fee summary and to offer you our updated Form ADV Part 2A (Brochure) for [YYYY].
Your Advisory Fee Summary — [YYYY]:
Fee Schedule: [e.g., 1.00% on first $1M, 0.75% thereafter]
Billing Method: [Quarterly in advance, based on prior quarter-end balance]
Average Account Value ([YYYY]): [$XXX,XXX]
Total Advisory Fees Paid ([YYYY]): [$X,XXX.XX]
Additional Costs You Should Be Aware Of:
In addition to our advisory fee, you may have incurred the following third-party costs:
Changes to Our Fee Schedule: [e.g., "There are no changes to our fee schedule for YYYY+1." OR describe any changes clearly.]
Our updated Form ADV Part 2A is enclosed / available at [link or "upon request"]. This document contains important information about our services, fees, and conflicts of interest. Please review it and contact me if you have any questions.
Thank you for your continued trust in [Firm Name]. I look forward to continuing to serve you in [YYYY+1].
Sincerely,
[Advisor Name]
[Title]
[Firm Name]
[Phone] · [Email]
When you raise your fees, a proactive notification letter can make the difference between a client accepting the change and a client beginning to shop around. Give clients at least 30 days' notice (check your client agreement for the required notice period). Acknowledge the increase directly, explain the value drivers, and invite them to discuss it. Transparency and lead time go a long way.
With RIALetters, generating annual fee disclosure letters for every client takes minutes, not hours. Customize the template with your fee schedule, add each client's specific fee amounts, and produce a professional letter ready to send. No more copying and pasting from last year's version and forgetting to update the figures.
Fee disclosures, ADV summaries, RMD reminders — every client letter your practice needs, generated by AI in seconds.
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