July 1, 2009
To Whom It May Concern:
I am writing you concerning the proposal that would affect investment advisors who are deemed to have custody of client assets that would require an audit of the firm by a third party accounting firm. I do not believe that the ability to take fees from client accounts should require this or that a limited power of attorney to place trades in clients’ accounts should have any bearing on this. Client fees are disclosed to the client each time that they are taken from the clients’ account and clients are notified regarding each trade transaction. I believe that the estimated cost of $7000 to $8000 for an audit is a huge price to pay for someone that does not have normal direct access to the clients’ assets. I can understand why this might be needed for investment advisors who maintain direct custody of client assets, and I believe that is where the problems have arisen in the past and the need for an audit is proper in those circumstances. I think that the burden is excessive for those investment advisors for which there is very little risk for any issues.
With being a CPA I am also aware that an audit does not mean that everything is going to be caught. An audit is a test of the transactions, etc. and not every transaction is looked at. A certain amount of assurance can be given an audit, but you can not be 100% sure that everything is perfect.
Thank you for the opportunity to comment on this proposal.
Larry Hilkemann, CPA/PFS
CHRISTENSEN BROZEK FALTYS
Wealth Management * CPAs * Business Consultants