Subject: File No. S7-06-04
From: Kathleen McInerney, CFP®
Affiliation:

April 5, 2005

Dear Mr. Katz:

I have been a financial professional since 1985 and a broker since 1990, and am concerned about the above rule and its intention to help investors to understand the investment that they may be adding to their portfolio.

Currently, the investor is provided ahead of time, has the obligation, and is encouraged to carefully review prospectuses, financial statements and other financial information prior to making a transaction. This process is done so that the investor will wisely consider the investment based upon its own merits, including costs, and within the context of their overall portfolio.

Investors are also encouraged to discuss ahead of time their concerns and questions regarding the risks and opportunities of the investment with their financial professional. And, along with their financial consultants, investors also receive a confirmation of the purchase or sale and are encouraged to review it for accuracy of the fees, based upon information that they have received ahead of the actual transaction.

I am not certain that the “Point of Sale” disclosure provides the balance of information that the investor needs to consider before making a transaction. Because an investor should weigh all factors of suitability, adding this disclosure may do a disservice by emphasizing cost above other investment elements, such as risk, opportunity, appropriateness to the investor’s objective, etc. This, in turn, may lead investors to select an investment simply based upon low cost—perhaps, with the thought of quickly trading out of an investment if it is not continuously going up—rather than considering the value of the investment in terms of the investor’s particular goals or building wealth over time.

If investors need better information with regard to fees, then I would urge the SEC to refocus efforts on creating a more user friendly prospectus that would better aid investors in their decision making process.

Sincerely,

Kathleen McInerney, CFP®
LPL Financial Services