Subject: File No. S7-25-99
From: Arthur E Molloy, CFA, CFP
Affiliation: President, Capital Growth, Inc.

August 24, 2004

I have been an securities industry professional for well over 20 years. I first registered my firm as an RIA in 1986. I am opposed to the SECs proposal to exempt B/D firms from the Investment Advisor Act of 1940 when offering fee-based brokerage accounts to the public. There are too many instances of abuse, ignorance and poor disclosure already taking place in the industry. Opening the doors even wider will only add fuel to the fire that is already burning.

The public will likely pay more in overall costs for their investment accounts if there is an exemption granted to B/D firms. As you know, there is already a problem with too many fee-based accounts which do not have any meaningful activity to justify a fee being charged to the customer. There will certainly be a lower grade of investment advice delivered in aggregate, as more investment salespeople push their unwitting customers into products which are inappropriate. Please consider withdrawing this proposal. Thank you.