Subject: File No. S7-25-99
From: Paul E Coan

January 11, 2005

In early 2002 while working at Morgan Stanley as a financial advisor stockbroker we had senior management from NY travel to Indianapolis along with other branches. The meetings were to push the new Choice accounts. Which is a fee-based account for clients. At these meetings, we were told the industry is changing. One quote stuck in my mind, we use to get paid for the trade and give our advice away for free, now we get paid for our advice and give the trade away for free. This is how Morgan Stanley pushed their brokers in placing client assets in fee-based accounts. Selling advice?

This is why brokers should NOT be exempt from the 1940s Advisor Act. They are in deed selling advice, and it is not soley incidental according to the broker-dealers themselves.

The SEC should protect the investor and not the B/Ds. Either they should be held the a fiduciary standard, or not sell advice.

Of course if the SEC does hold them to the 40s Act, then please pay attention to the disclosures they give to clients. If its a mountian of information designed to overwhelm the clients, does it really do any good? Of course not.

However, I will conceed that the logistics of this will be very burdensome to the large B/Ds.

The SEC is full of very smart people, GOOD LUCK in fixing a problem started years ago.