July 9, 2009
The proposed change in the SEC requirements is onerous and unnecessary. It does not get to the heart of the problem which is actual custody of assets. RIA firms are subject to fiduciary responsibility standards which contain "prudent man rules". These standards require us to tell the clients what they own, how much they are earning or losing in value and how much we are charging them. This is full disclosure and should be required of all of us. Debiting fees from client's accounts does not constitute custody of assets. It is simply a convenience to the clients which they appreciate.
It is tiring and inefficient when a rotten apple like Madoff taints an entire industry and causes new requirements that are unnecessary and detrimental to our clients. Ultimately, the consumer pays for all of these extra procedures which lowers their investment returns.
We need enforcement of the rules that we have, not new requirements that burden the investing public.