Subject: File No. S7-06-04
From: John Bill, CFP

March 3, 2004

As a financial planner, I can tell you that it is becoming harder and harder to help middle class investors because of the compliance paperwork that is already required.

Example: I recommend a Roth IRA to a husband and a wife and a 529 plan for each of two kids. To accomplish this now, I already need 4 new account applications, 4 required client introductory letters, 4 application forms, 4 mutual fund disclosure forms 3 pages each, along with all the supporting documentation and prospectuses for these investments. If they want to pay by a fee, then I need to also supply an additional contract and disclosure statement and 30+ page ADV form. These clients really need help understanding and getting going on their investing. But more forms piled on top of these existing forms just means to me that I cannot deal with less than affluent investors. It is just not worth all the time and effort to help smaller investors. The more layers of regulation that come from every direction will not harm the upper class. It will harm the middle income people, because it raises the cost of serving them to the point that it is not worth it. There must be a way to regulate the industry without gumming up the system to the point that, unless you are an affluent client, it bogs down under a mountain of paperwork.

That is my main concern.