Subject: File No. S7-09-09
From: William I Meyer

July 6, 2009

Dear Sirs,

I am opposed to the regulation as it is proposed.
A quick review of Registered Investment Advisors portfolios will show that most advisors work with small households averaging only $18,000 per account. RIAs provide valuable support to these families, and RIAs cannot afford the cost of an audit without passing the cost on to the clients. Passing the audit cost on to small clients could put investment advice beyond the reach of some clients. If the costs arent passed on or if the RIA must absorb bad debt write offs as a result of unpaid invoices, RIAs could be put out of business. This will result in less service to the public (the same public that desperately needs fiduciary advice that is only available from an RIA). For those firms that are able to stay in business, the competitive advantage of smaller RIA firms would shift to larger firms (those who can more easily afford to spread the cost of the audit over a larger client base). The more personal touch of a small advisor relationship with the client could be lost.

The consumer would also not be best served by this regulation. In tough times such as were in now, advisors have had a large cut in compensation because of the reduction in portfolio values. In times like these RIAs actually work harder for less money. People by their nature tend to procrastinate making payments to their creditors at times like this. They reduce their payments to the doctor, the dentist, and the accountant but not to the telephone company because they cut service if they are not paid. People who are stressed pay the urgent not the important bills. Professionals tend not to get paid in times like these because they are important not urgent. Independent investment advice is a two way street. If we are not paid we are no longer independent making us creditors wanting to get paid. It becomes difficult to offer or accept advice in such an adversarial situation. At a time when the public urgently needs independent advice, the clients could be placed in a more difficult position if the person whose advice they seek is no longer accessible because of a past due invoice.

Thank you for your consideration,

William I. Meyer