Subject: File No. S7-25-99
From: Nancy Yamagata

October 31, 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.

When a commission is at stake ofen times it seems that greed will win instead of reason. PLEASE hold financial advisers accountable for their recommendations so the consumer is not EXPLOITED! 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.


Ms. Nancy Yamagata
PSC 557 Box 1576
FPO, AP 96379-1500