Subject: File No. S7-09-09
From: Robert B Needham, CFA
Affiliation: R. B. Needham Advisory Corporation

July 28, 2009

I understand the concern of the SEC in light of recent public scandals. The proposed solution, however,appears to add needless expense to those firms that use independent custodians who send statements directly to the client and those statements contain records of all payments made to the advisor for fees under a Limited Power of Attorney granted by the client. Confirmation of the charges, under current rules, are sent in a timely manner to the client by the advisor. This arrangement should provide an exemption from the proposed rules. The cost of the surprise audit would be a burden to all but the largest of firms, particularly coming at a time when revenue has been seriously compromised by market conditions.

If the advisor provides and controls custody then common sense would idicate that the proposed regulation would be justifiable since there is no independent third party serving as gatekeeper. If the intention is to eliminate the potential for future Madoff's to operate, then force advisors to use independent custodians. Adding a cost to advisors that is in most cases not needed will put us at a disadvantage with bank managers and put substantial pressure on our profitability and ability to survive without increasing the cost to our clients.

The proposal should apply to those advisors who do not use independent custodians and follow the current protection procedures that have worked well for most advisor clients for many years.