March 3, 2004
I hope you will take the following comments to heart regarding the proposed changes you are considering.
I have been in the financial services industry for over 30 years. Like most financial planners, I have built a loyal following of clients who absolutely depend on my advice and counsel. They dont call a mutual fund companys 800 phone number for advice on what to do when the market goes up or down. They call me. They also call me when there are scandals on Wall Street, be they with public companies or mutual fund companies. We also review their investment programs periodically to make sure they continue to match up with their goals, objectives and risk tolerance. Most of these reviews are done without benefit of any additional compensation other than 12b-1s.
IF YOU ELIMINATE 12b-1 FEES YOU GREATLY REDUCE MY ABILITY TO SERVE THE DAILY NEEDS OF MY CLIENTS
If 12b-1s are eliminated our firm will have to eliminate one staff position and immediately start to refer client inquiries to strangers on an 800 phone line who know nothing about their risk tolerance, their goals and their dreams.
A 12b-1 FEE IS NOT COMPENSATION WE RECEIVE FOR DOING NOTHING. WE EARN THEM EVERY DAY PROVIDING SERVICE TO OUR CLIENTS THAT WE COULD NOT OTHERWISE AFFORD TO PROVIDE, SERVICE THAT CLIENTS EXPECT AND DESERVE.
I hope you will reconsider your decision regarding the elimination of 12b-1 fees.
James P. Ruth, CFP