Subject: SEC's Proposed Changes to the Custody Rule s7-09-09

July 28, 2009

Good morning,

As a RIA we are strongly opposed to this proposed rule. While I understand the SECís rationalization I firmly believe you will be doing the public a disservice.

Independently, this would force me to raise fees without cause as we are ethical and highly prudent when dealing with fees in client accounts. As a member of NAAIM, the below is a consensus of our groupís thoughts as well:

o The requirement of surprise audits for advisors who have ďcustodyĒ solely because they deduct client fees from an independent custodian flies in the face of over 35 years of SEC rulemaking.

o Why punish most advisors who use independent custodians, instead of requiring independent custodians of the few hundred that donít use such custodians. That would get at the heart of the Madoff problem without everyone else bearing the cost.

o There is no connection between the problem the SEC is trying to deal with and the solution proposed.

o Surprise audits offer no additional investor protection when the assets are custodied at an independent, third-party custodian. What would the audit disclose that the receipt of the custodianís statements does not already reveal? How would your clients benefit? Would you pass the costs on? Would you stop deducting fees? Detail your custodian arrangements.

o The SEC says the reason for the audit is to get ďa second pair of eyesĒ on the lookout for fraud. But we already have two sets of eyes: the clientís and the custodianís Do we really need the third?

o We are not aware of any situation where the ability of an advisor to withdraw fees from an independently custodied account opened the door to fraud.

o Despite the fact that there is no documented fraud associated arising from an advisorís ability to deduct fees from an independent custodied client account, the Commission is proposing passing on over $55 million in audit costs to these advisors and their clients.

o The audits may require accountant letters to each of our clients every year - 8,214,262 across the nation


All the best,

Jim Goodland, WMS
Wealth Management Specialist