July 2, 2009
I am an FPA member and State of Washington Registered Investment Advisor. Please be aware that I am opposed to the requirement in the proposed amendments to the custody rule that would subject investment advisers to a surprise audit by an accounting firm. We are a small two person firm and the cost of this audit could be a heavy financial burden to us as well as our clients. It seems to me that the real problem here is the inability of the SEC to take action where action is needed. I would support having the SEC empowered and regulated to ensure that they are responding and taking action against firms who have been identified as being fraudulent.
I do believe that consumers do need to be protected as much as possible from criminal advisors. But, I think adding another layer of “audits” is not going to do much especially when the auditors are being paid by the firm being audited. I would much rather appropriate more funds to the SEC and state regulating entities to enhance or increase their abilities.
Our clients are sent an invoice of the fees deducted from their accounts for our management fees immediately. They also receive monthly statements from the custodian detailing the activity in each of their accounts. All of this information and much more are available to our state agency during an audit.
Thank you for your time and consideration.
Tammera L. Prouty, CFP®
Associate Financial Advisor