Subject: File No. S7-09-09
From: Eric E Haas

July 7, 2009


I am responding to proposed rule IA 2876. Specifically, the proposed rule requires Investment Advisors -- who technically have custody solely because of an ability to withdraw fees directly from accounts -- to pay for independent audits on an annual basis.

I have several issues with the proposed rule:

A. The proposed rule is obviously being considered in the interest of enhanced consumer protection. However, my understanding is that there have been few, if any, problems of this nature identified in the past. Thus, this may be a situation where you are attempting to fix something that isn't broken.

B. My best estimate of the cost of such an audit is about $8,000 annually.

This would represent approximately a 75 increase in my annual overhead expenses. As a small business, you can imagine how this would affect my profitability. Because my fees are contractually established with my clients, I can't see a way of increasing my fees as a means of passing on the costs of these new audits. Thus, this would directly impact my own profitability. I am unaware of the existence of any systematic fraud or accidental errors of the sort such audits would attempt to expose -- among Investment Advisors who only have custody to the extent that they are able to withdraw fees directly from client accounts. Therefore, it seems like forcing such advisors (or ANYBODY) to incur dramatically high additional costs to prevent such problems seems unjustified. While the cost of such audits may be trivial for larger companies, I can assure you that a 75% increase in my overhead is far from trivial.

In summary, I believe that the benefits to consumers of such audits are greatly exceeded by the costs. I urge the commission to remove the independent audit requirement's applicability to investment advisors who have custody solely because of their ability to withdraw fees directly from client accounts.

Thank you,

Eric E. Haas
Altruist Financial Advisors LLC
Holland, MI