Subject: File No. S7-09-09
From: Kathy S Boobar
Affiliation: Fiduciary Financial Services of the Southwest, Inc.

July 15, 2009

To Whom It May Concern:

We are a small RIA firm managing approximately $200,000,000 on behalf of our clients and we are against this proposed rule change to require surprise audits of RIAs who automatically deduct fees from client accounts. While we understand the need for proper oversight authority to help protect consumers, we believe this proposal places an unnecessary burden and cost on investment advisers and ultimately their clients. There is no additional protection of the clients' assets when the assets are held by a third party custodian and the fees are remitted by the custodian to the RIA.

We suggest that the SEC consider only requiring audits of firms that take physical custody of a client's entire account, not those who custody assets at an independent third party clearing firm and who only collect fees their management fees from the account. When an advisor has physical custody of a clients account, there is opportunity for mischief to occur. In the Madoff case, there was supposedly a "surprise" audit by an independent CPA but this did not serve to expose any of the misappropriations which occurred. Why is this method suddenly supposed to work?

The proper deduction of client fees which have been fully and formally disclosed in writing and assessed on account values is hardly an example of a custody of assets. Once fees are calculated and disbursed they are no longer client assets. Like many other firms, we use third-party custodians like TDAmeritrade or Fidelity. Each of these companies is fully audited and reviewed. And in no case does an investment advisor have control or access to the accounting systems operated by these custodians.

Please don't punish the RIA firms (and cause higher fees for their clients) that are striving to follow the numerous regulations already in place. Enforce what is in place first

Thank you for the opportunity to comment.

Kathy S. Boobar
Fiduciary Financial Services of the Southwest, Inc.