June 30, 2009
I am an independent registered investment advisor, and I am deeply concerned and opposed to the proposed rule changes. Some of our accounts are discretionary, but limited to trading authority only. We do not have custodial control of our clients' assets, but I still have serious concerns that we are being over-regulated and that there are already more than adequate laws, rules and regulations on the books. But, it seems that the Federal government doesn't have the gumption to truly enforce the existing rules, or doesn't want to take on the expense of running the SEC and FINRA to enforce these regulations. Rather, it seems to me that the approach is to force the independent businessman to incur an $8,100 estimated expense that will have to be passed on to clients, which would then likely lead to the smaller investment advisors having to shutter their doors. I've been in this business almost 40 years and have witnessed one major fraud case after another, all of which could have been prevented by a more vigilant SEC. It bothers me that the former head of FINRA is now the head of the SEC. It bothers me that the regulations today are significantly more complicated thaan at any time in the past, and have become so onerous as to force small independents like myself to hire outside compliance consultants to ensure that we stay in compliance with a system of regulations that makes it almost impossible to operate our business. I have already absorbed more than $12,000 in annual expenses in the past year to keep our practice in line with the regulations. Recent moves by some States are now adding other costs that can no longer be absorbed. My message is loud and clear - ENFORCE THE EXISTING LAWS AND REGULATIONS & LET US TAKE CARE OF OUR CLIENTS. The vast majority of us are honest, capable and taking care of our clients with due diligence. Please don't lump us together with frauds like Bernie Madoff, and those that came before him. The magnitude of the problem is not with investment advisors that have small practices, rather it rests within the the ranks of unregulated hedge fund managers and advisors that the SEC has for too long ignored. Put those folks under the same magnifying glass that I've been under my entire career. I've managed to stay clean because of my ethics, integrity and putting clients first. Instead of foisting $8,100 of new expense on me and others, go after the crooks that have had complaints filed against them yet have never seen an SEC audit.
William Powers, CFP