Subject: File No. S7-25-99
From: James E Pearman, Jr
Affiliation: Fee-Only Financial Planning, LC

August 31, 2004

I urge the Commission to Withdraw the proposed rule exempting broker-dealers from the Investment Advisers Act of 1940. There is an increasing trend for broker-dealers to hold themselves out as providing investment advice as part of their services.

I believe the proposed rule is harmful to consumers by creating two different standards of conduct for persons offering financial planning services: a higher fiduciary standard for registered investment advisers such as my firm and a lower one under NASD suitability rules. The proposed rule also exempts, in effect, brokers from being required to disclose conflicts of interest in connection with the offer of financial planning services.

The Commission should act to level the playing field for all firms offering investment advisory services by withdrawing this proposed rule and its resulting exemption for broker-dealers from the investment advisory rules.