Regulators are looking for ways to increase accounting safeguards for investment advisors who have custody of client assets, but an investment advisor's group says some of the proposed changes are too broad and go too far.

Proposed amendments to Rule 206(4)-2, requiring all investment advisors that control or have custody of client assets to hire an independent public accountant to conduct an annual "surprise" examination of their books, would place an unnecessary burden on small advisory firms, according to the Washington-based Investment Adviser Association.

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