March 1, 2004
I strongly oppose the elimination of 12 b-1 fees on accounts that have registered representatives providing advice and service to the client. Example: I have 25 million dollors in A shares in American Funds for my clients. These dollars represent half the assets I manage for clients. None of these clients are in any fee-based wrap account. The 12 b-1 fee is the ONLY ongoing compensation my firm receives for giving ongoing advice and service to these clients. My portion of the compensation is approximately 42,500 annually. Considering this is gross commissions on 1/2 my business before taxes, business expenses, staff compensation I have 2 employees, how could this be considered unfair or excessive in my case????
I have no problem eliminating 12 b-1 fees on accounts that have no servicing registered representative, but I cannot be expected to work for free. PLEASE, dont throw out the baby with the bathwater.