July 6, 2009
As a small registered investment advisor the requirement to hire an auditing firm simply because I have the ability to bill clients through their investment account would be unduly burdensome and very expensive relative to assets under management. I believe that custody and management should be separated, but the fee question puts a non-custodial RIA in the same position as the custodial RIAs. Those that share custody and management need controls. Those that simply bill clients do not.