AdvisedAssetsGroup

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FILED ELECTRONICALLY
May 5, 2010

Office of Regulations and Interpretations
Employee Benefits Security Administration
Room N-5655

U.S. Department of Labor

200 Constitution Ave., NW

Washington, DC 20210

Re: 2010 Investment Advice Proposed Rule
Ladies and Gentlemen:

Advised Assets Group, LLC (AAG) appreciates this opportunity to comment on the
participant and beneficiary investment advice regulation proposed by the U.S.
Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) on
March 2, 2010. AAG is a federally registered investment advisor providing independent
financial advice and managed account services to over 200,000 participants of qualified
group and individual retirement plans. AAG administers retirement portfolios with
aggregate assets of approximately $4 billion.

AAG is a wholly owned subsidiary of Great-West Life & Annuity Insurance Company
(Great-West Retirement Services”), the 4th largest administrative services provider to the
nation’s group retirement plans, providing investment products and services to over 4
million Americans with aggregated assets of approximately $100 billion.

AAG provides investment advice and managed account services to plan participants
utilizing a computer model described in EBSA’s SunAmerica Advisory Opinion'. Thus,
so long as the new laws and regulations do not adversely affect our ability to continue to
provide the advice products and services as we have done for years, we have no comment
with respect to the “eligible investment advice arrangement” provisions in the proposed
regulation.

We do, however, want to take this opportunity to strongly:

1) Advocate for the preservation of the SunAmerica model, and

2) Caution against any attempt in the regulations to dictate what criteria an
investment adviser and plan fiduciary can consider in connection with
making investment recommendations.

"EBSA Advisory Opinion 2001-09 (December 14, 2001). 8515 E. Orchard Road, 10T2
Greenwood Village, CO 80111

Phone 800.888.4952 ext. 41066
Fax 303.737.6544



1. Preservation of the SunAmerica model. AAG commends EBSA for expressly
stating that neither the proposed regulation nor the Pension Protection Act of 2006
(“PPA”) exemption relating to investment advice affects the prior guidance issued by
EBSA pertaining to the provision of investment advice.

Specifically, the current independent advice programs promote the use of high-quality,
unbiased investment advice. Millions of plan participants currently receive independent
investment advice and discretionary management under methods that do not raise
conflict-of-interest concems. It is extremely important that these existing permissible
investment advice arrangements, which the DOL has previously found not to require
exemptive relief, remain available for plan participants.

We strongly believe that the SunAmerica model provides the opportunity for efficient
large scale distribution and availability of investment advisory services to retirement plan
participants that are completely independent and objective. For example, through
distribution partners such as AAG and Great-West Retirement Services, Ibbotson
Associates (a recognized industry leader in asset allocation solutions and a subsidiary of
Morningstar, Inc.) provides access to the highest quality of applied academic excellence
in retirement portfolio construction and management to over 23 million Americans
regardless of their age, account balance, or the size of the firm for which they work?,

While the proposed regulations admirably intend to expand the reach of investment
advice to additional American workers, it is critical and imperative that the effectiveness
and momentum already in place under current advisory models be preserved in these and
any future regulations.

2. Generally accepted investment theory. AAG is concerned about provisions itrthe
proposed regulation that dictate what criteria an investment adviser and plan fiduciary
can consider in connection with making investment recommendations. The preamble to
the proposed regulation states that:

“[In] connection with investment advice arrangements that use computer
models, that a computer model shall be designed and operated to avoid
investment recommendations that inappropriately distinguish among
investment options within a single asset class on the basis of a factor that
cannot confidently be expected to persist in the future (paragraph
(b)(4)(i)(E)(3)). While some differences between investment options
within a single asset class, such as differences in fees and expenses or
management style, are likely to persist in the future and therefore to
constitute appropriate criteria for asset allocation, other differences, such
as_differences in historical_performance, are less likely to_persist_and
therefore less likely to constitute appropriate criteria for asset allocation.”
(Emphasis added.)

> Morningstar, Inc. Investment Advice Comment Letter to EBSA dated May 5, 2010


EBSA also requested public comments on a number of questions regarding

investment theory, including which theories are, or are not, generally accepted, whether
the regulations should specify certain investment theories and require their application or
preclude the application of others, whether the regulations should dictate the bases for
model parameters, and whether historical data should be taken into account in
determining a model’s expectation for future performance of asset classes and specific
investment alternatives.

Investment models either developed or certified by independent financial experts should
not be constrained in terms of the factors considered relevant by the expert to distinguish
between investment options of any given asset class. Such constraints would lead to the
favoritism of single factors such as fees to the detriment of overall portfolio construction.
Such constraints could also lead to bias toward certain investment strategies (such as
passive strategies versus actively managed strategies) again to the detriment of overall
portfolio construction.

Furthermore, EBSA should not include parameters or limitations on the definition of
generally accepted investment theories. Like any science, the study of investment
management is an evolving one, with constant research driving ongoing innovation and
improvement. Any limitations or specifications on what is or is not an acceptable
investment theory will stifle the innovation necessary to ensure that portfolios continue to
be constructed in the most advanced and beneficial manner for participants.

AAG appreciates the opportunity to comment and thanks EBSA for taking time to
consider our views. We are available to discuss these issues in greater detail at EBSA’s
request. Please do not hesitate to contact us at Advised Assets Group, LLC, 8515 E.
Orchard Road, 10T2, Attention: David McLeod, Greenwood Village, Colorado 80111.

Respectfully,

David G. McLeod
Vice President and Managing Director,
Advised Assets Group, LLC