Subject: File No. S7-25-99
From: Todd Washburn, CFP

September 22, 2004

I would like to request that the Commission withdraw the Broker-Dealer Exemption Rule from consideration. It, inadvertantly or by design, creates confusion for the public and an uneven playing field for Investment Advisors.

The public confusion stems from a lack of understanding of the nuances of the rule. Two individuals/organizations can be offering through advertisement, etc., what sound like the same services- wealth preservation, college planning, etc.- but have very different obligations to the client/customer. The Investment Advisor- registered through the SEC or his/her state- has a fiduciary obligation to put the clients interest first, to disclose conflicts of interest, to reveal arrangements with third parties, etc. Registered Representatives claiming that their work is incidental to their primary services, do not have to comply with any of that. The public cant discern what is incidental, nor for that matter can advisors since it hasnt been defined by the Commission in any workable manner.

Financial Planning, as a profession, is not the same as stock brokering, insurance sales, etc. While plenty of registered advisors sell or do those things, they are responsible for putting their clients interest first. This rule allows others to avoid that responsibility. I cant for the life of me see how that benefits the public. The public is intelligent, and given proper information through full disclosure, they will migrate to where they believe their interests are best being served. This rule seeks to limit that disclosure and to prevent the public from making a fully informed decision.

Yes, I am a state-registerd investment advisor. Planning advice is not incidental to my work. The way the major brokerage firms are packaging their services and advertising them, it appears planning advice isnt incidental to them either. If they want to claim that, they need to be registered and make the same disclosures as the rest of us. If they dont wish to do so, they need to stop claiming to provide those services. Withdrawal of the rule in question will not force brokerages, etc. out of the advice-giving business, but it will force them to decide that if they wish to stay in it, they must fully-inform the public. If they dont wish to do that, they can stick to activities not covered by the Advisors Act.