Oct. 30, 2023
Dear Securities & Exchange Commission, I am writing to express my concerns regarding the proposed rule on safeguarding advisory client assets. While I understand the goal of enhancing investor protections and addressing gaps in the custody rule, there are several aspects of the proposed rule that raise important considerations, particularly with regards to the potential impact on small businesses in the advisory industry. As a strong advocate for small businesses, I firmly believe in their importance to our economy and the financial well-being of communities across the country. It is crucial that any regulations put forth by the SEC take into account the unique challenges and limitations faced by these small entities. One area of concern is the new reporting requirements imposed by the proposed rule. Small advisory businesses already face resource and compliance challenges, and adding further reporting requirements may exacerbate these difficulties. It is important to remember that these small businesses play a vital role in providing financial advice and services to individual investors, often in underserved or remote areas. By burdening them with excessive reporting requirements, we risk stifling their ability to continue serving their clients and hampering their potential for growth. I strongly urge the SEC to conduct a comprehensive analysis of the potential impact on small businesses and consider alternative measures that would alleviate the burden while still ensuring that investor protections are upheld. This could include exemptions or streamlined reporting processes specifically tailored for smaller entities. By providing targeted support, we can ensure that small advisory businesses can continue to thrive and contribute to the financial well-being of their clients and communities. In conclusion, I appreciate the SEC's commitment to enhancing investor protections. However, it is vital that we carefully evaluate the potential negative impact on small businesses in the advisory industry. By taking these concerns into account and exploring alternative approaches, the SEC can strike the appropriate balance between regulation and fostering a supportive environment for small businesses. This, in turn, will help ensure that investors continue to have access to high-quality financial advice and services. Thank you for considering my concerns. I am passionate about supporting and empowering small businesses, and I strongly urge you to thoroughly evaluate the potential consequences and implications of the proposed rule. I appreciate the opportunity to contribute to the public comment process and offer any further insights or clarifications that may be required. Sincerely, Jason Lutowsky