July 9, 2009
I am writing to express my opinion regarding the idea of surprise audits by independent CPA’s. As an Advisor, who has clients’ investments held by a Third Party Custodian (Pershing), with no access to clients’ money, this rule will do nothing to ensure quality and only increase my cost of operating a small business. I am 100% in favor of excellent compliance and oversight. However, let’s be realistic, those who are predisposed to sidestep or ignore the law, will do so, regardless of regulations. Ask yourself this question, if all the regulations that currently exist were properly supervised, would it have prevented or uncovered the despicable acts of Madoff and other schemers who have defrauded the public? If the answer is yes, then perhaps that is where the focus needs to be and not increase the cost to small business owners with no benefit to our clients. Our clients are very comfortable knowing that there is an independent third party who holds their funds. What benefit will be derived for them or for my business by creating another layer of cost and distraction?
Thank you for your time.
Michael F. Kay
President, Financial Focus, LLC