July 1, 2009
If this change is enacted, I will be forced to deny my clients the ability to have their advisory fees automatically deducted from independent accounts at Fidelity, Schwab or TD Ameritrade so that I can avoid the additional expense and administrative hassle of an independent audit that I am not currently undergoing. Fortunately, the majority of my clients pay their fees by check, but some do have fees debited. If this change is enacted, the latter group will not be able to have the convenience of auto deduction, as they do for utility, mortgage, credit card, income tax and a host of other bills. Do you really believe that Madoff would have succeeded with his nefarious deeds if his clients had their assets at Fidelity, Schwab or TD Ameritrade? Do you think Bernie could have stopped the independent statements from those firms in favor of his own phony statements? This proposal is beyond overkill and will result in huge increases in cost which will be paid for by the clients. Why don't you just say that assets must be custodied at an independent custodian and leave it at that? Then the SEC would have an easier job of policing, and schemes such as Bernie's could not happen.