Subject: File No. S7-09-09
From: Stephanie Burris
Affiliation: President, Prosperity Investment Advisors, Inc.

June 24, 2009

Subject: File No. S7-09-09

Recommendation: I believe that advisors who use a "qualified custodian" should be exempt from the changes proposed to rule Rule 206(4)-2.

Advisors who custody assets in house should be subject to stricter custody standards and surprise SEC audits. There is a need to protect the public from Madoff - like cases in which the Advisor also acts as the broker dealer, advisor and custodian.


1. Low Risk in Qualified Custodian Case : Advisors and their clients who utilize a qualifed third party custodian are already providing another "set of eyes" and those eyes are already highly regulated. The client has the ability to check on their assets any day online and receives quarterly or monthly statements for ALL transactions and fees in their accounts. The client must sign multiple documents consenting to fees. Fee transactions are limited to a small percentage of the assets by the custodian and if there is an unusually large fee, it must be documented and signed off on by the client before the advisor is paid via the custodied account.

2. High cost: The cost of surprise audits of a subset of accounts at a qualified custodian will be astronomical and that cost will be passed on to the consumer.

3. Less Choice for Objective Investment Advice. Lower net worth individuals will not be able to bear such costs and thus will be pushed back to non-objective brokers who call themselves "advisors" but push proprietary products and higly commissioned products. Given the lack of financialy literacy in the United States today, objective advisors are badly needed by the public.

4. Impractical: I live in a small town where there will be few qualified audtiors.

5. Auditing and training the auditors: The audits, if needed, should be conducted by the SEC as a part of the normal audit process. In many recent cases of abuse, the auditor was hired by the advisor and was of questionable competency and questionable neutrality.

Thank you for your consideration.


Stephanie Burris