Today is audit day. Every year someone impeccably
dressed from the headquarters of my Broker-Dealer shows up at my office door
looking very official. He or she demands to see a few randomly selected client
files. Then they want to see all of my compliance files. There’s the
correspondence file, the checks received blotter, and the thankfully empty
customer complaint file. Then he or she disappears into the conference room
where they pour over it all looking for a mistake. Eventually they leave
without saying anything except, “If there’s a problem, you will hear from us.”
Somewhere in the witches brew of my DNA is a
molecular strain that predisposes me to rebel against authority. I have always
struggled with the concept of having a boss, which is most likely why I ended up
working for myself. Still, there is no such thing as total independence.
Everyone has some form of a boss. In addition to my wife, and the IRS, I must
ultimately answer to the suits at my Broker-Dealer. I do so reluctantly. I have
never been able to buy into the fiction that they are “on my side, and that we
are all in this together.” My view has always been that they perform their
intense oversight of my business to protect themselves, not me. If I became a liability
they would run away from me faster than a southern democrat running away from
Obamacare in November.
Nevertheless, I never fear these annual audits for one
very simple reason. In thirty years, I have never done anything intentionally
deceitful to a client. I have never taken advantage of a client’s ignorance. I
have always tried to do what was in his or her best interest, not my own. I say
this not as a boast, but rather because merely as a practical matter, honesty
is so much easier than deceit. Imagine how Bernie Madoff had to feel every time
his office was audited. His mind must have been filled with tortuous worry.
Would all of his schemes escape scrutiny? Would an indiscreet moment or an
ill-filed report turn up? I cannot imagine having to endure that every minute
of every day. Honesty allows for peaceful sleep. Honesty doesn’t require a good
memory. It turns out that your Mom was right all those years ago when she
warned you that if you became a liar, your lies would eventually catch up with
you.
Now, this is not to say that I have nothing to fear from these audits. I am
not the most organized person on the planet. My record keeping skills often
leave something to be desired. But, administrative mistakes seldom get you
carted off in hand cuffs. Better to be unorganized than a liar. I guess Bernie
was the worst of both worlds…an unorganized liar.
When this audit is over with, I’ll have to get
prepared for next week’s OSJ audit. Tis the season!
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