Subject: File No. S7-25-99
From: Charles B. Stalford

July 22, 2004

I am writing to oppose the pending rule that broker-dealers do not have to meet the fiduciary and other standards of the Investment Advisors Act if they provide advice on an "incidental" basis and meet other criteria


As a general matter the rule makes no sense. The criterion that advice is provided "incidental" to brokerage services is particularly specious. Brokerage service is a commodity these days. Look only at Scottrade, Ameritrade and other disxoubnt brokers charging as little as $7.00 per transaction to realize that. Yet customers of Merrill and similar brokers will pay $2,000-3,000 or more per year for a fee-based relationship. They are paying for the advice, not the mechanics of a brokerage account. Indeed, Merrill stresses the advisory basis of the relationships in their advertising. They can't have it both ways.

I am a CFP who functions as an registered investment advisor representative as a part of my services. Therefore, I obviously have an interest in this matter. However, I am slso a retired senior manager in the Federal government with experience in program and policy analysis. From that perspective I don't see how anyone could rationally approve the pending rule. In effect, the brokerage industry would have its cake and eat it too.

Thank you for consideration of these thoughts.

Charles B. Stalford
Fairfax, VA