Disclosures mandated in 2011 by the SEC help investors become more informed about the financial advisers they work with or wish to retain. CPAs can use them as part of their due-diligence process.
CPAs will be viewed as fiduciaries, according to Walter M. Primoff, CPA/PFS, former deputy executive director of the N.Y. State Society of CPAs and co-author of CPA Guide to Opportunity. “Like attorneys, [CPAs] have always had more malpractice exposure than most others in the wealth management arena,” he said. For this reason, it is important that CPAs perform the necessary due diligence before making a referral to a financial adviser or retaining an adviser when acting as a trustee. To this end, reviewing an adviser’s newly mandated SEC disclosure documents can provide a wealth of key information. The documents serve as a road map for the CPA to follow to unearth comparable information from advisers who are not subject to these rules.
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source: Julie Jason J.D. , http://www.journalofaccountancy.com
