Accessible Version of PDF: Guardian Trust Comment Letter
Dated: June 7, 2011
Office of the Secretary of the Commonwealth
ATTN: Proposed Regulations
Securities Division, Room 1701
One Ashburton Place
Boston, MA 02108
RE: Proposed Regulations Affecting Massachusetts Registered Investment Advisors
Dear Sir:
I wish to express my serious concerns on the section of proposed regulations entitled "Investment Advisor Discretion and Custody Requirements".
I have found that for small private fiduciary firms such as ours, bonding insurance companies have already stated that they will not increase the present $10,000 bond requirement currently required. Guardian Trust, Inc. is a small private fiduciary (not a bank) with under $5,000,000 in current assets under management.
If the bond requirement is not scaled down for such small businesses as ours we will be put out of business and our clients will be forced to find new fiduciaries. Hence, the increased bond requirements should be kept unchanged for businesses with under $50,000,000 in assets under management. It would appear that the proposed regulatory changes are specifically targeting much larger businesses to begin with. The end result, however, will be to put many small operations out of business.
Our firm is now a one-man operation with over 24 years in private practice and another 18 years as a vice president for a major bank trust department. Our client base is shrinking as aging clients expire and their accounts become distributable. With several present clients in their nineties, it Would be a major traumatic experience for them to have to find new fiduciary relationships under such circumstances.
In the future, private fiduciaries would be prohibited, by the increased bond requirements,from starting such a business, except with much larger start-up asset bases.
