Raskob Kambourian Financial Advisors has agreed to pay approximately $1.8 million to settle allegations of failing to disclose fee increases to clients, according to a statement from the Securities and Exchange Commission (SEC) last week.
The SEC claims that the Tucson, Arizona-based registered investment advisor (RIA) overcharged 59 clients by $1.36 million beyond what was authorized under their original fee schedules outlined in client agreements. Without admitting or denying the allegations, Raskob Kambourian consented to the entry of a final judgment. The total settlement includes the alleged overcharges, interest, and an additional monetary penalty imposed by the SEC.
Requests for comment from Raskob Kambourian’s attorney and firm representatives went unanswered.
According to the SEC, between May 2019 and July 2022, Raskob Kambourian charged fees exceeding those agreed upon in client contracts. While the firm periodically raised fees, it allegedly failed to adequately disclose these increases in writing or communicate the changes to clients in a timely manner. The SEC claims this omission constitutes a breach of Raskob Kambourian's fiduciary duty as an RIA, which requires transparent communication regarding fee structures.
In a civil complaint filed on September 5 in federal court, the SEC emphasized that Raskob Kambourian’s failure to properly disclose fee increases was critical to its clients. "The only monthly account statements Raskob Kambourian’s clients received never provided a clear breakdown of the fees charged or any changes to them," the complaint states. "Instead, the charges were listed as a single item without further explanation."
Raskob Kambourian was registered with the SEC until October 2023 but is now under the jurisdiction of Arizona’s state securities regulator, according to regulatory filings. The firm currently manages $77 million in assets across 75 clients.
The case underscores the importance of clear communication and transparency, particularly when it comes to fees. For wealth advisors, fee transparency is critical to maintaining client trust and fulfilling fiduciary obligations. Advisors should take note of the SEC’s strict stance on fee disclosures and ensure their own practices align with regulatory expectations.
Fee increases, when not properly disclosed, can result in significant regulatory scrutiny. RIAs must not only ensure their clients are fully aware of any changes to fee structures but also that these changes are communicated in a timely and explicit manner. In this case, Raskob Kambourian’s failure to do so led to substantial penalties and reputational damage. Wealth advisors should view this case as a reminder of the necessity to review and consistently update fee disclosure practices, both in client agreements and in periodic communications like statements.
Additionally, this case highlights the risk RIAs face when operating with inadequate disclosure protocols. The SEC has increased its focus on fee-related compliance, particularly around situations where clients may not fully understand the total costs of the services they receive. Regularly reviewing and updating fee structures, as well as ensuring clear and consistent communication, can help prevent costly enforcement actions.
For RIAs, the lesson from Raskob Kambourian’s situation is simple: transparent communication is not just a best practice—it’s a regulatory requirement. Advisors should be proactive about notifying clients of fee adjustments and ensure that those changes are clearly documented in all relevant materials. Wealth advisors who fail to disclose fees accurately risk not only losing client trust but also facing significant penalties from regulators.
In summary, the case of Raskob Kambourian is a stark reminder for wealth advisors and RIAs alike to prioritize fee transparency. Proper fee disclosures are not optional—they are essential to fulfilling fiduciary duties and maintaining client relationships. Advisors must ensure their practices are fully compliant with both SEC and state-level regulations, particularly as regulators continue to focus on fee-related enforcement.
Wealth advisors and RIAs would be wise to take this opportunity to audit their own fee disclosure processes, ensuring that clients are informed of any changes in a clear and timely manner. Such proactive steps will not only help advisors avoid regulatory issues but also strengthen their relationships with clients by fostering transparency and trust.
