From: Trish Stone-Damen
Sent: Tuesday, August 20, 2002 1:54 PM
Subject: File No. S7-28-02: Proposed Rule Changes 206(4)-2:

Jonathan G. Katz:

Thank you for receiving my comments concerning the Proposed
changes to Rule 206(4)-2 under the Investment Advisers Act of
1940.

We are a dual registrant with the SEC as an investment adviser
and broker/dealer and I am writing to you with regard to
Qualified Custodians and the proposed rule. requirement of
monthly delivery of account statements.

Currently, as a broker/dealer and investment adviser, we offer an
asset allocation program, consisting of investment company
shares, to educators investing primarily in individual 403(b)
(IRS Code) retirement accounts. As an investment advisor, we
provide a number of advisory services to participants including
regular quarterly review of accounts and related rebalancing and
reallocating of assets among funds.  Currently, as an Investment
Company Plan (as defined in SEC Rule 10b-10b(6) ), we provide
quarterly statements in lieu of immediate confirms pursuant to
SEC Rule 10b-10(b)(1). The quarterly statements capture all
transactions for that period including the quarter end deduction
of advisory fees by the plans custodian. Typically, most
transactions in a participant's account (with the infrequent
exception of a transfer in of new qualified money") occur at
quarter end and are related to the rebalancing and reallocating
process.

Based on the text of the proposed rule, a Qualified Custodian
would need  to provide monthly statements to clients or else be
subject to the surprise audit requirement for custodians. Due to
the fact that the majority of transactions, including the
deduction of advisory fees, occurs at quarter end, and in light
of the high cost involved in producing and distributing
statements, we believe that monthly statements would not be
necessary to achieve the intent of the Rule. We request that the
Commission allow a dual registrant who is also a Qualified
Custodian to continue to provide quarterly statements to clients
pursuant to SEC Rule 10b-10(b) as described above without the
imposition of a surprise audit.

Thank you for your time,


Sincerely,

Trish Stone-Damen
Vice President Legal/Compliance
PlanMember Securities Corporation