July 7, 2009
As a RIA I am opposed to the proposed rule change that would require RIA's to an annual surprise audit for billing client fees from their account. Now, the rule is that billing the client account for fees, with authorization, and notifying clients on the same day does not constitute custody in the same sense as having check writing authority or ability to withdraw client funds. Changing the current rule would result in increase cost to clients and would not help them in any way.
There is insufficient justification or cost benefit for the rule change.
Any rule change the SEC makes will be automatically adopted by all the state regulators as well.
Dr. Gary J. Harloff, Ph.D.
Harloff Capital Management, RIA