Subject: File No. S7-25-99
From: Henry A Tiedemann, CPA
Affiliation: AICPA

August 24, 2004

Regarding the SEC proposal to exempt broker dealers and their representatives from the Investment Advisors Act, I disagree with the exemption. I own a Registered Investment Advisor currently state registered and am a licensed Registered Representative at a broker/dealer. In addition, I am a practicing CPA and Certified Financial Planner.

In negotiating the rules regarding financial planning and providing investment advice, there are some grey areas where my CPA practice could provide the investment advice or financial planning advice and have it considered to be an incidental part of my practice that would be exempt from separate licensing requirements. Because there are significant issues associated with providing investment advice and financial planning that require substantial training and oversight that I determined that I should have a separate registration as an RIA. In proposing to waive separate registration, the broker/dealer community will be expanding their business without adequate oversight. In my CPA practice, I have performed many audits of broker/dealers. Although there are many registered reps that could manage wrap accounts without significant oversight, there are many that would treat these accounts in the same manner as retail brokerage accounts.

It is my hope and expectation that registered reps would be subfject to the same level of scrutiny on managed accounts as RIA firms. As presently constructed, if the exemption is passed, there will be a large gap between the oversight on managed accounts at brokerage firms as opposed to RIA firms. I urge you to retract the proposed exemption.