Subject: File No. S7-09-09
From: James Miller
Affiliation: Woodward Financial Advisors

July 16, 2009

I am writing in regard to the SECs Proposed Changes to the Custody Rule, Release No. IA-2876, Custody of Funds or Securities of Clients by Investment Advisers. My firm is an SEC registered firm. I am a Certified Financial PlannerTM licensee and a member of the Financial Planning Association.

I am opposed to the proposal for several reasons. There is a clear distinction between having discretion over a clients account and having custody of a clients account. The fact that we choose to place client accounts with a third party custodian is a clear indication that we choose not to have custody of those accounts. The fact that we deduct fees from those accounts does not and should not change the definition of custody. To my knowledge, there have been no problems related to the deduction of client fees so the SECs attempt to tie the fee deduction process to custody seems over reactive and unnecessary. The estimated cost ($8,100) alone is reason enough not to implement this amendment. It would impose an unbearable cost on firms and is likely to put some others out of business. This cost would obviously be passed on to clients at the end of the day.

The SEC and FINRA ignored repeated warnings from the media and whistle blowers about Madoff. Therefore, Congress and the SEC should hold FINRA accountable for its shared oversight (or lack thereof) of Madoff and other Ponzi schemes, which resulted from a lack of aggressive enforcement by both organizations.

I support good regulation but do not support unnecessary and reactive regulation. What is needed is well thought out and rationally discussed regulation. The regular cycle of audits by the SEC will work if the Commission has the resources to perform them on a regular basis. I would support Congress providing the SEC with the necessary resources to hire and train new staff members to perform regularly scheduled audits.

Thank you for the opportunity to comment.