July 1, 2009
I have just been informed that as a registered investment advisor that rules are being proposed that will subject me to a surprise audit by an independent public accountant. I appreciate that you are trying to protect consumers but this is going to be very difficult for me, as a sole proprietor, to live with. Three big concerns come to mind immediately:
1. Who is going to pay for this? If a study has been done outlining the cost to the taxpayer versus the benefit the taxpayer is going to get I would like to examine it.
2. I am a sole proprietor and so there is only one employee in my firm - me. My office is in my home but I am often not in my home because I am with clients. How is this “surprise” going to work? If I am meeting with a client am I going to be required to leave at a moment’s notice to get back to my office so you can review something? What if I am on vacation or a long way from my office? Electronics allow me to monitor my client’s activity from just about anywhere but this sounds like all the electronic capability in the world is useless.
3. I am unaware of any serious issues stemming from this. In past audits I have had my fees deductions from my client’s accounts spot checked by the current auditor. How has this failed in whatever you are trying to accomplish and how is this proposal going to find whatever problems you are looking for?
There are a number of areas that need to be overhauled in my industry that would help consumers of financial services enormously, which I would be happy to share with you; however, this isn’t one of them.
Milton E. Fullen, CPA, CFP®, ChFC, CASL, CLU
Fullen Financial Group, Inc.
Registered Investment Advisor