Subject: File No. S7-09-09
From: Michael L. Fenison CFP, AIF, RFC
Affiliation: Pure Financial Advisors, Inc.

June 30, 2009


I am an SEC registered investment advisor. I received an alert today from the FPA regarding S7-0909 with a summary of the proposal. I have been in the financial services industry since 1981 and although I have not always completely agreed with proposed changes to rules, this is the first time I have disagreed strongly enough to write. For advisors that use third party custodians and third party performance reporting, I would be surprised to find any issues worthy of 9,000 plus audits at over $70,000,000 of additional cost to clients and lost productivity for the advisors.

Advisors deducting advisory fees owed from a client discretionary account, at the client request, while held at third party custodians has not been considered custody and should not be considered custody now. These third party custodians report all transactions directly to the client and are fully transparent.

This seems to be a reaction to all of the negative press regarding Madoff and others who do not fit the profile of the typical SEC registered Investment advisor. Why not spend more money following the leads of inappropriate conduct that are falling on deaf ears rather than creating a new burden for the advisors following the existing rules and increasing expenses for clients?

The only winners in this proposal are the contracted independent public accountants.


Michael L. Fenison CFP, AIF, RFC
Founder, CEO