Subject: File No. S7-25-99
From: Austin Gallaher, PFP
Affiliation: Financial Planner, Wealth Analytics

January 19, 2005

In your re-proposed rule you cite concerns that broker-dealers are now marketing claims of providing financial planning services while continuing to lobby for an exemption from advisor registration. I can site no better example of the current marketing environment than the following from the Merrill Lynch web site:


Merrill Lynch web site Research Commentary tab.

The Value of Advice

It used to be that stocks and bonds were enough. But its different now: You need advice that looks at your complete financial life to help you achieve your goals. Trusted guidance should be an expectation, and youll get nothing less from a Merrill Lynch Financial Advisor.
To deliver on this, your Financial Advisor may utilize the Wealth Management Process to develop a personal plan for you. From Establishing Objectives to Setting Strategy, Implementing the Solutions and then regularly Reviewing Progress, your Financial Advisor can help as you implement your own strategies for success.


I cannot imagine how this could be construed to be incidental advice. If broker-dealers are to operate under the exemption from the Investment Advisers Act 1940 you propose, this sort of marketing needs to be prohibited. If broker-dealers wish to provide services such as a ... Wealth Management Process to develop a personal plan... they should be required to register as investment advisors.

I suggest that broker-dealers and their representatives who operate under the proposed exemption be expressly prohibited from using the following terms in describing their services:

Financial Planning
Financial Advisor
Financial Consultant
Wealth Management
Wealth Management Process

Further, I believe that the contracts, forms and advertising provided under this exemption carry the following disclaimer:

Investment Representatives of the firm provide investment advice that is limited to the buying and selling of securities. Investment Representatives of the firm do not provide financial planning advice and their fiduciary responsibility to the client is therefore limited in scope.