Date:    04/12/2000 1:25 PM
     
     
     
Subject: File No. S7-25-99
     
Mr. Jonathan G. Katz
Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549-0609
     
Re:  Release Nos. 34-42099 and IA-1845; File No.
S7-25-99; Certain Broker Dealers Deemed Not To Be Investment Advisers
     
I am an independent, fee-only financial advisor and investment 
management firm in Littleton, Massachusetts. Carpenter Associates is 
currently registered as an investment advisor with the Commonwealth of 
Massachusetts,Division of Securities.
     
I am writing you today to register my objection and opposition to the 
proposal to exempt brokerage firms from registering as registered 
investment advisory firms under those certain circumstances defined in 
the above-styled release.
     
This proposed rule clearly blurs the distinction between financial 
advisers who are working solely in the best interests of their clients, 
and brokers whoappear to be making the same offer, but are instead (in 
the widely-used industry parlance) merely gathering assets for their 
brokerage firm. This in itself would be misleading enough, in that it 
would allow professionals with a sales agenda to pretend that they are 
offering objective services. But it is much more harmful if those sales 
professionals who are masquerading as objective advisers are then 
allowed to skirt the normal disclosure requirements imposed on the 
community of registered investment advisers.
     
It has clearly been the case that the primary hallmarks of the 
regulatory scheme promulgated by the SEC have been that of accuracy of 
disclosure and fullness of disclosure.  That is, disclosure is a good 
thing. If the brokerage firms were required to offer their ADV forms to 
the public, and were prohibited from offering testimonials as to the 
value of their services (read: a full and accurate disclosure standard 
like that required under the RIA regulatory structure) then the public 
would have the opportunity to gauge the objectivity of the advice being 
offered.  Under the proposal, these important safeguards would be 
voided.
     
The brochure rule, the prohibition on testimonials that is so clearly 
flouted in the brokerage industryadvertisements, and the other 
regulatory protections of RIA registration are not too onerous for 
brokerage firms to comply with should they refocus and begin creating 
(or advertising that they want to create) advisory relationships with 
their customers. If theSEC's primary goal is truly to offer basic 
consumer protections and disclosures, then you will continue to require 
all who hold themselves out as investment advisers to register as such, 
regardless of their place of employment.Please advocate that the 
Commission will continue to fulfill its duty and commitment to the 
public.
     
Bottom line everybody plays by the same rules...no exceptions.
     
David Carpenter
     
Carpenter Associates
An independent, fee-only financial advisory firm 
20 Meetinghouse Road
Littleton, MA  01460