Subject: Proposed SEC Custody Rule s7-09-09

July 7, 2009

To Whom It May Concern:

The SEC’s proposed custody rule requiring investment advisers who have the authority to debit advisory fees from clients' custodial accounts to undergo an annual surprise audit by an independent certified public accountant is overly burdensome and an unnecessary reaction to the recent events in capital markets including fraudulent misconduct. The annual cost alone, which likely would range from $10,000 to $25,000 depending on firm circumstances, would result in significant increases in investors’ costs and create an added compliance burden for an industry already experiencing extraordinary cost increases due to new regulations.

Most investment firms are owned, managed and operated by honest individuals who should not be discouraged by such regulation. Witness what has happened in the medical field, where malpractice insurance costs and claims processing expenses are bankrupting our healthcare system. I suspect the industry would be willing to live with a prohibition against debiting a client’s account for fees and be required to obtain client approval (by e-mail) for each transaction rather than deal with the audit requirement.

Thank you for your consideration.


Alex Fisher