July 1, 2009
I am opposed to the newly proposed regulation as it will directly impact my clients and will cost them in the end. I will be forced to pass on this cost to my clients. It would seem to be more prudent to focus on the places where lack of focus by regulators under existing audit requirements was missed and thus cost investors. Those who have direct custody of assets should be the primary focus and the secondary focus should be to enforce the laws that are currently on the books.
If this regulation were to pass, I would have to either pass on the audit cost through higher fees or I would have to eliminate this billing method as an option to my clients thus limiting their choices. Today they receive quarterly (at a minimum) and sometimes monthly statements which indicate any fee sweeps and they also receive a “fee notice” from my firm indicating what the fee sweeps are. There are ample opportunities for the client to review and assess the fee without creating additional compliance costs.
Mark Ivcevich, QKA®, AIF®