October 27, 2010
-I was informed about your recent proposal for allowing brokers to set their own commissions. I RECOMMEND YOU REJECT THIS PROPOSAL.
I have been in the insurance business for over 33 years and the new classes of mutual funds that have no fees would cause the market to benefit the upper class and leave the middle class market not able to afford the fees that registered reps typically charge. The middle class stands to loose. Just look outside of the neighborhood in which you live and look at faces and homes of the the majority of Americans that are struggling to make ends meet - much less make contributions to an IRA.
On the surface the proposal makes sense, to allow competition amongst carriers to set their own commission rates. But I think that the typical clients that I serve, the blue collar and hard working Americans, would not be sought out to establish a retirement plan and thus would not have any guidance except the talking heads on radio and television because they wouldn't or couldn't afford the fees of the registered reps left serving the market. The typical client doesn't make enough return on their meager savings to warrant the payment of a fee to a financial planner. This would keep them poor and ill prepared for their own futures. It seems that fair prices are what is important here. Your proposal to change the 12b1 fees to improve disclosure - I ENDORSE. But if you change the amount that companies charge it will be a road straight to fee based planning. Fee based planning is great for upper class.
The folks that you would like to protect, the middle and lower market investors, will be hurt by this proposal by being deprived of the guidance and service that they need and deserve.