Oct. 27, 2022
October 27, 2022 Regarding this proposal, we wholeheartedly applaud it. Too often when retail investing clients hire an investment advisor to manage their hard earned money, they automatically assume that the investment adviser representative (IAR) with whom they have engaged will be selecting securities and then subsequently managing them on an ongoing basis, based on their purported skill and/or experience. In reality, not enough IARs or RIAs are proactively managing their clients money, but indeed outsourcing this critical responsibility to a third-party without thorough and ongoing oversight. The industry at-large has adopted this operational solution to effectively allow advisors to focus more time developing client relationships. Such an esoteric pursuit, though important when understanding your clients goals and objectives and increasing firm profits, should not be used as an excuse to fully eject a fundamental service area from an advisors assumed core function. At our own RIA and those advisors affiliated with us, we believe deeply in the investment advisory service area. Outsourcing is viewed by our advisors as a lazy option. As a firm, we maintain a clear investment discipline and philosophy and actively manage distinct portfolio strategies with varying risk profiles to serve various client goals and objectives efficiently and with full accountability and transparency. This is done because it is our firms passion, but it also validates our clients belief that we are in fact actively evaluating and reevaluating their portfolio holdings on a forward-looking basis. Furthermore, providing investment advisory services in this non-outsourced manner allows us to remove additional layers of fees often incurred with outsourcing solutions. Clients are rarely made aware of these additional fee layers, which most often take the form of moderate to high internal expense ratios of the funds selected by a third-party manager. As a result, net of fees performance may be woefully underperforming a standard benchmark over a full market cycle. We hope this proposal will be enacted, as it will level-up and challenge the dominant service delivery model currently employed by so many IARs and RIAs. It may also inspire advisors to seek out firms that offer rigorous and disciplined portfolio strategies, which provide valuable intellectual capital development for like-minded advisors. In turn, this should result at the very least in a more authentic client investing experience. Sincerely, Ivan Manuel Illan Chief Investment Officer Aligne Wealth Advisors Investment Management (AWAIM) www.alignewealth.com