July 10, 2009
Requiring an audit simply because an RIA can withdraw management fees is misguided. As long as the RIA does not have custody of the funds and fees withdrawn are shown on the clients statement (that he gets directly from the custodian), I do not see how this warrants an audit. There are much bigger issues regulators should be looking at. This will hurt small RIAs and be a waste of time for everyone.
Jim Thomas, CFP