July 1, 2009
As a small, locally owned Registered Investment Advisor, the proposed rule would hurt us and our clients. We directly debit management fees from client accounts to avoid paper billing and trying to collect our compensation from hundreds of people. If subject to expensive audits, our costs would skyrocket and our clients would be subject to additional costs and headaches.
Clients appreciate the direct billing and circumvents the potential of cutting off service to clients that do not pay on a timely basis. In addition receivables will absolutely increase accounting, bookkeeping and carrying costs further hampering the small business owner
To subject us to an audit is an expense that has never been our responsibility. Puts the responsibility on the adviser to pay a fee that may be onerous and unwarranted. An audit creates enormous time commitment that is directed by someone we do not even know and a firm that may not know anything about our business. There is no incentive for the firm performing the audit to make the audit less onerous and actually creates business for CPA firms.
I believe in compliance, regulation, and protecting the client interest this proposed regulation may not do either.
This regulation appears to put the responsibility for supervision as an additional fee to advisors. Our firm currently pays SEC registration fees, annual maintenance, CRD fees, and more. Now the supervision that we believe we now pay for must be a new surprise fee that actually may be the highest individual expense other than compensation of staff.
This proposed regulation is onerous and on the surface appears random, and potentially devastating for small firms.
Mark S. Germain CFPtm MBA
Founder and CEO
BeaconWealth Management LLC