Subject: File Number s7-09-09

July 16, 2009

These proposed rule changes make it clear that the SEC has no interest in providing the public with access to smaller, independent, boutique registered investment advisors, who would be most burdened by the fees outlined in the proposals. Instead, these changes would help larger firms consolidate their position and gain market share, or possibly change the landscape in such a way as to force investors back to the B/D Wirehouse model, from which so many have fled.

Ultimately, this system would hurt consumers far more than it would ever help them. Not only would client fees for those RIAs that survive increase, consumers would have far less choice in selecting an investment advisor due to the forced consolidation and business elimination that would ensue. Mary Schapiro is following Rahm Emanuel’s adage of not letting a crisis go to waste, as she is using public outrage over the Madoff and Stanford fiascos (which happened on her FINRA watch, no less) to rip apart the world of RIAs in favor of large, factory-like broker/dealers. It is shameful, disgraceful, and ingenuous.

Ben Birken
Woodward Financial Advisors