Subject: File No. S7-25-99
From: Douglas Rice
Affiliation: Professor of Economics, Golden Gate University

August 24, 2004

Please tell me how I explain to my students that there are two sets of rules for conduct of investment advisors.

There seems to be no rational reason for this other than the lobbying efforts of the big firms.

Please tell me that after all we have been through in the last several years that the SEC isnt going to allow Broker/Dealers to NOT disclose EVERYTHING to their clients when the client is clearly seeking advice.

They are advertising ADVICE, not sales contests pushed at them through a brokerage account.

Either withdraw the rule or provide a rational reason that I can use to tell my students that the SEC is doing their job protecting the public. Because with this rule, NOBODY is protected from these firms.

Not only do the FPA and Consumer Federation of America object to this but so does the AARP. Broker/dealers are profit making companies that must take every advantage they can as they are driven by increasing shareholder value. That is why it is critical that the SEC mandate consumer protection. When they tout advice, they have the same responsibility that a registered investment advisor has and they need to abide by the same rules. There simply isnt any reason why they shouldnt other than it will cut into profits for them.

Please protect consumers and let me teach my students that the SEC is doing its job.