Subject: File No. 4-606
From: Lance G Kroesch

July 30, 2010

Compliance costs-both in terms of finances and time-are high, and those costs are eventually felt by clients. Adding another layer of regulation means another layer of compliance, and even more cost to clients. I hold Series 6, 7, 63 and 66 licenses. I am also an Investment Advisor Representative. I try to use the same level of care with all clients - offering them alternative products such Wrap Acct, MF or VA. I present the Pros and Cons of each offering and then let the client choose -- even though each product has a different compensation structure. There is paperwork associated with the IA/Wrap Acct business that seems to me to add NO value to a better solution for the client.

My Broker/Dealer and Investment Advisor conduct ANNUAL internal audits of my office and operations.

I feel I am already acting in the "best interest" of my clients, the Investment Advisor Act does not define what the rules are for compliance with a legal "best interest" standard - thus subjecting registered representatives to the potential of never ending lawsuits. For example, is "best" the cheapest recommended product? The "best" premium relative to the benefit of the product? The product with the "best" historic underwriting and service standards? Is it the one from the carrier with the "best" rating? The fiduciary standard in essence adds a vague legal liability standard that looks back (sometimes after many years) and is enforced after the fact by the SEC or trial lawyers who have perfect vision in hindsight.

I would advise that adding a whole new layer of regulation will not be the panacea of stopping a small number of Reg. Reps from doing wrong. You can't legislate Ethics and Morality.