From: Ronald Scott Colson, CFP, MBA [ronald@colsonfinancial.com] Sent: Monday, June 24, 2002 12:04 PM To: rule-comments@sec.gov Subject: File No. S7-25-99 Dear Ladies and Gentlemen, Don't exempt Broker-Dealers from registration under the Investment Advisors Act of 1940, or similar state laws and their incumbent disclosure and fiduciary standards. In light of recent scandals, America needs more transparency, not less. I am a fee-only Registered Investment Advisor. I am unable to benefit by referrals from CPA firms because I don't charge clients enough to have any left over with which to "bribe" CPA firms for their referrals. On the other hand, broker-dealers like Merrill Lynch and Dean Witter offer clients of CPA firms "free" financial planning that almost always leads to high-commissioned product sales. These onerous commissions are shared with the referring CPA firms as an inducement for having led their client "lambs" to slaughter. The "financial planning" offered by broker-dealers is extremely biased toward selling their own products, not solving client's financial problems, yet most clients are very trusting and are totally unaware that they are being taken advantage of. The excessively high commissions that are extracted from accounts are NEVER in the best interest of the clients. However, clients usually are not aware of the depth of the financial planning bias or the amount of the commissions they will pay because there is no requirement for their full and complete disclosure in real dollar terms. Mostly, commissions are not even discussed with the client unless the client specifically requests, in which case broker-dealers usually allude to the complicated percentages listed in the pages of prospectuses that clients never read. Broker-dealers NEVER list the total that will be paid in real dollar terms that clients can fully understand. If broker-dealers were required to give disclosure in real dollars of the huge commissions that they will earn as well as the revenue-sharing arrangements with referring CPA firms, clients would at least be better informed. Further, clients would be much less likely to be taken advantage of through their blind trust in their self-serving advisors. Please, do not exempt anyone who provides investment advice from registration under the Investment Advisors Act of 1940. These laws were put in place to protect clients from the very type of unethical practices that broker-dealers are trying to hide. Require full disclosure! Thank you. Respectfully, Ronald Scott Colson, CFP, MBA, President Colson Financial Group, Inc. 485 S. Youngfield Ct. Lakewood CO 80228-2509 (303) 986-9977 ronald@colsonfinancial.com