Subject: File No. S7-36-10
From: Jeffrey W McClure, CFP
Affiliation: President, The Wealth Coach, LLC.

December 31, 2010


Regarding the change in regulatory responsibility for mid-sized investment advisers from the SEC to state regulatory authorities, my recommendation is that a firm within 15% of the cut-off should be allowed the choice between state and SEC registration. Those that are down-sizing and anticipate falling below the cut-off on a permanent basis should be able to change registration at the annual renewal point at $115 million under management while those anticipating a rise to the $100 million level should be eligible to register or remain registered with the SEC if they have at least $85 million under management.

Background and Reasoning:

A significant issue arises for an investment adviser near the cut-off boundary of $100 million in assets under management. Our firm registered with the SEC in mid-2007 and achieved the $25 million level in time to retain the federal registration. In the three ensuing years we have grown to about $85 million under management despite the fall in market valuations. We are continuing to grow both from market appreciation and new assets and clients being added to our firm's management. We anticipate reaching the $100 million cut-off at some point during 2011.

If there is no significant flexibility in the cut-off of $100 million by July of 2011 we anticipate a significant probability of having to register with the state of Texas as well as other states, deregister with the SEC and then at the end of the year deregister with Texas and other states and again register with the SEC.

The combined effort to rewrite, deregister, register with multiple states, deregister with multiple states and re-register with the SEC in less than a year has the potential to so distract us that we anticipate a significant challenge to our ability to maintain our promised level of attention to our clients and their investment portfolios. I cannot imagine a scenario in which taking the time to personally focus on the multiple rewrites, registrations, and deregistration requirements over the next year will not degrade our client and portfolio capabilities and service. If nothing else, the volume of paper we will need to provide our clients under this scenario will be overwhelming to them.

By definition those firms which have around $100 million are smaller and less well staffed than larger firms. Frequent registration changes would be detrimental to effective client service and portfolio management. This would be particularly adverse during those times of high market value variability when clients need a high level of personal time and attention and portfolios require frequent analysis.

As an example, during the time period from October 2008 through March 2009, our full attention and concentration was required in order to both respond to and proactively inform our clients while reallocating virtually all of our portfolios in response to the dramatic decline in market values. During that period our total assets under management fell over 25%. Had we at the same time been forced to change our registration from the SEC to the states, we, and I fear, our clients, would have been completely overwhelmed. It would have been similar to being forced to change building code requirements and building inspector teams while the building was on fire.

I thereby recommend that a buffer area be established around the $100 million cut-off of 15%. If a firm is currently registered with the SEC and has demonstrated multi-year asset growth that would reasonably allow it to reach the $100 million level by the next registration filing date, then allow that firm the option to remain registered with the SEC.

Thank you for your time and consideration of this comment.