Subject: File No. S7-25-99
From: James A Stehr, AIA

September 10, 2004


Ladies and Gentlemen:

Please register my strong and impassioned plea to remove your Merrill Lynch rule that now permits broker-dealers to render fee-based, financial planning and investment advisory services without registering under the Investment Advisory Act of 1940.

As a victim of a broker who offered me biased investment advice without making such disclosure, and as a novice investor who knew nothing of the distinction between a fiduciary and a suitability standard of care, I made a bad investment that ultimately lost 20,000, then about 15 of my net worth.

Fortunately, I was young enough to be served by that wake-up call and to start immediately to learn what went wrong. After months studying the financial services industry and the various sources of investment advice, I was astounded to learn of the critical distinction mentioned above.

I was furious Why, I wondered, was I as an uneducated consumer of investment advisory services albeit an honors grad from a prominent university not protected by regulatory agencies from at least the ignorance of this distinction? And why were those who rendered investment advice not all held to the same standard of care by law or regulation? Had I known that the advice I was getting was only incidental to the transaction of a product sale, and a proprietary product at that, I would surely have stopped to ask myself if I might inquire with others less biased about this important decision.

With the mega-trend toward self-directed investing for retirement and with the huge and ever-increasing numbers of individuals like me investing for the very security of our later lives, you must do nothing short of providing us with the most rigorous protections against this abuse. To do less is to violate your charge as a trusted government agency in service to the taxpayers and citizens of this country.

Yes, the Merrill Lynch rule is subtle. But its potentially harmful effect on the individual investor can be gravely profound. As it is, you have left the stage set for exactly the kind of abuse that I suffered, and to which you should have alerted and protected me years ago.

Please save others from similar harm. Remove the Merrill Lynch rule at once. Then, go farther to mandate plain English, written disclosure by brokers that any investment advice they give is only incidental to their conduct of a transaction of sale and NOT subject to a fiduciary standard of care, unless, of course, theyre paid specifically for that advice.

This is not an era of buyer beware. Its a new world of seller disclose, and millions of unsuspecting, vulnerable people deserve your protection.


James A. Stehr, AIA
Alameda CA