Subject: File #S7-09-09

July 1, 2009

Subject: File #S7-09-09

From: Janet Elder, ElderAdo Financial

I am writing to express my opposition to the proposed amendment by the SEC requiring an annual surprise audit of investment advisors who use a third party custodian to deduct fees from client accounts for services rendered. This is an unnecessary and burdensome requirement for small RIA firms.

We are a RIA firm registered with the SEC using a third party custodian for our client’s investment accounts. Clients sign an agreement for our custodian to pull our management fees from their accounts. Monthly statements are sent by the custodian showing these fees. Our firm also sends out quarterly statements providing information on paid management fees. A checks and balance system is already in place to protect against discrepancies and fraudulent account activity.

Surprise audits would have a negative impact on many RIA firms. Audits are costly and would potentially put small RIA’s and employees out of business. The cost to manage accounts would be increased in order to help pay for this costly audit. Ponzi schemes had nothing to do with fees deducted by RIA’s and there have been no problems with the manner fees have been handled previously. Investors and RIA’s would be better served by the SEC if they would follow-up when warnings are given to them to investigate.

In summary, I vehemently oppose the surprise audit proposal to the custody rule, File #S7-09-09.

Janet Elder

ElderAdo Financial