Subject: File No. S7-09-09
From: Alan Bewley
Affiliation: Investment Advisor Representative

July 1, 2009

I am a small one-man firm with less than $16mm under management. I deduct fees from less than 20% of accounts, all others are associated with a 401(k) plan that does not allow fee deduction. Additionally, my firm only brought in $70,000 in revenue last year. Subjecting firms like mine to a surprise audit by an accounting firm would cost around $10,000 per year and would put me out of business as my profit margin is currently only 54%.

I am registered in 5 states but in a few years will look at being SEC registered as we are trying to grow. States will no doubt adopt this guidance and put me out of business before I am able to reach critical mass in light of the giant cost of audits.

From a compliance standpoint, no fee is deducted without an invoice generated and sent to the client. Broker-dealers such as Schwab and TD Ameritrade monitor fee deduction and disallow activity that exceeds 2% of assets (on an annual basis). Client statements and trade confirmations come directly from the custodian to the client. Because of this, it is impossible for me to generate false "Madoff" type statements and/or trade confirms.

Instead of this devastating rule change, why not make a sensible rule that does not effect those of us that don't generate statements and trade confirms but go out of our way NOT to have custody. Not only is this rule unfair, it is unreasonable.