Subject: File No. S7-25-99
From: Lary Mydland

October 29, 2004

William Donaldson

Dear Donaldson,

Instead of creating a division between brokers and investment advisers based on the nature of the services they offer, this SEC rule proposal would expand the brokers' exclusion from the Advisers Act to include instances in which the broker receives special compensation for advice. This is exactly the wrong direction for the agency to be taking.

The broker/investment adviser distinction is important for investors, because investment advisors are subject to a higher standard of conduct than brokers. While advisors have a fiduciary duty to place their clients' interests ahead of their own, brokers are subject to a less exacting obligation to make suitable recommendations. Brokers are required to make some disclosure of conflicts of interest, but those requirements are neither as timely nor as extensive as the disclosure requirements that apply to investment advisers.

Investors need to know that all financial professionals who offer investment advice are subject to the same rules. To accomplish that, the SEC must define solely incidental advice, and it must do so in a way that limits such advice to the sort of buy this/sell that recommendations which are an inherent part of the broker's sales function. It is very difficult to for any individual to maintain objectivity when presenting advice when that advice can be of monetary advantage. Maintain a level of standards that retards self serving motivations.


Mr. Lary Mydland
6211 SW Brangus Rd
Lathrop, MO 64465-8244