Subject: File No. S7-25-99
From: J Michael Fay, CFP
Affiliation: CEO, Claremont Financial Group, Inc.

September 7, 2004


I believe that the SEC should withdraw its rule exempting broker-dealers from the Investment Advisers Act of 1940 when offering fee-based brokerage programs.

Current wire house activities fail the exemption test. I believe a careful interpretation of the wording of the Investment Advisers Act of 1940 cannot help but conclude that the larger wire house organizations have placed investment advice at the heart of the great majority of their customer relationships, and that many of their brokers-cum-counselors are compensated in ways that clearly fall into the area where brokerage activities end and investment advisory activities begin.

By this important standard, I submit that the wire house firms should be required to register as Registered Investment Advisers under the 1940 Act, immediately and without qualification.


J. Michael Fay, CFP