From: Jeff Wright [mailto:jeff@centerpointadvisors.com] 

Sent: Monday, November 01, 2010 7:18 PM 

To: EBSA, E-ORI - EBSA 

Subject: ESOP appraisers as fiduciaries

Department of Labor:

I recently read that certain regulations currently in development would make the

appraiser of ESOP stock a fiduciary.  That seems to be a particularly bad idea, and

a draconian step taken to deal with a much smaller problem.

I have been appraising ESOP stock for over 30 years.  I have the highest

professional designations in the field, including ASA (Accredited Senior Appraiser)

from the American Society of Appraisers, and the CFA (Chartered Financial

Analyst) from the Institute of Chartered Financial Analysts.  I have served on

many boards and governing committees for the American Society of Appraisers,

including the Business Valuation Committee, and as Chair of its Standards

Subcommittee for several years.  I taught business valuation for ASA for many

years and I have written on a variety of valuation topics in professional journals

and appeared on expert panels, including the topic of ESOP valuation.  I was

elected to the College of Fellows of ASA because of my contributions to the field

of business valuation, and professional appraisal.  I have been a member of the

ESOP Association, and the NCEO, for decades.  So, I am not a newcomer to this

area.  I have never had a complaint or claim regarding one of my appraisals,

either for ESOP stock or for any other purpose.  I keep up with my professional

education, and make sure that my understanding and knowledge in the field are

on the leading edge.  I have also made sure that my smallest clients can afford to

have good work done by keeping my fees low for those companies that cannot

afford to incur high ESOPS administration expenses.  Some of my clients are billed

for less time than we have put in the appraisal project because they are not large

companies that can afford it.  But they need good appraisal work and want to

continue having employee owners.

If regulations are adopted that make me a fiduciary as an ESOP stock appraiser, I

will quit doing that type of work.  It will not bother me at all because we have far

more demand for appraisal work than we can do.  I will simply switch to other

types of work and my practice will go right on.  But many of my clients will be

bothered, or devastated, and their employees will be the losers.  Some

companies will try to find another source of appraisal services, and they will see

their annual appraisal fee double, or triple.  Other clients will not be able to find
an appraiser who will do the work for a reasonable fee that they can afford.  They

are likely to terminate their Plan, and the employees will be the losers.  In short,

such a change would be devastating to many many small and medium‐sized ESOP

companies and possibly millions of employee owners.

As I understand the background for this potential change, it is because some

ESOP stock appraisals have been done incompetently, or in a biased or fraudulent

manner.  Every profession has its bad apples.  But there are other avenues to

solve this type of problem without giving competent, independent appraisers

fiduciary liability.  Independent appraiser, and fiduciary, are incompatible

concepts at their core.  This is a particularly bad idea.  I encourage you to seek

alternative solutions to the problem of bad ESOP appraisals.

Jeff Wright 

Centerpoint Advisors, Inc. 

10575 N. 114th Street - Suite 103 

Scottsdale, Arizona 85259 

P (480) 657-6220 F (480) 657-6221 

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