Subject: File No. S7-25-99
From: Charles Benway, CPA, CFP

January 14, 2005

It is hard to imagine that advice given by brokers can ever really be incidental to their brokerage business. When an investor puts his trust in a broker, there is no such thing as incidental. Brokers, by nature, are salespeople and their advice, fee-based or not, is hardly unbiased.

I am a CPA with a tax practice who, years ago, was licensed to sell mutual funds and was supervised by a broker-dealer. My first broker dealer arrangement ended when a B-D manager called me and tried to pressure me into advise my tax clients to refinance their mortgages through the B-Ds mortgage subsidiary, of course and use the proceeds to buy highly loaded mutual funds. He offered me a one-point commission and never gave a thought to whether it might be good for my clients. If my arrangement with clients were fee-based, would such advice be incidental?

My second broker dealer pressured me to sell insurance products under the guise of tax planning. My third broker dealer, which dealt strictly with CPAs because they have an advisory relationship with their clients, also wanted me to use that relationship to sell inappropriate products. Three years, three broker-dealers, three strikes. Co- Incidental?

I left that business and now work solely on a fee-only basis. My clients know they can trust me because I do not sell anything. When they pay for my investment advice, they know my allegiance is to them. There is no conflict of interest - not even a hint of it - and that is what am investor deserves when he puts his trust in an advisor.

There is a public expectation for fee-only advisors to be objective. However, the difference between fee-only and fee-based can easily be lost on the average investor.

The public will not be well served, if brokers have an incidental way around the regulations. Considering the widespread ethics violations that reached into every major brokerage firm, allowing exceptions for incidental advice would only result in a further erosion of the public trust.

Respectfully submitted,

Charles Benway CPA, CFP
Main Street Financial