From: G. Peter M. Viliesis
Sent: March 31, 2005
Subject: File No. S7-06-04

I am a licensed insurance professional and registered representative. I am writing to you because the new disclosure requirements contained in the SEC's proposal regarding the sale of mutual funds and variable products are unnecessary and will provide no meaningful additional protection to consumers.

This proposal:
  • increases distribution costs, ultimately paid for by the consumer
  • provide duplicative information, without full disclosure and enhanced understanding of the investment
  • create an unlevel playing field when compared to required disclosures for other investment products
  • fail to supplement or replace a consumer's need to become educated about investing in these products

Mutual fund and variable annuity prospectuses, which are reviewed by the SEC, already discuss the fees, risks and expenses associated with the purchase of these products. Very recently, in 2002, the SEC took steps to simplify the contents of the prospectus. If you feel there are additional issues regarding the contents of the prospectus, focus your efforts on further revisions to the prospectus requirements; if you still believe consumers should be given a "one-pager," the appropriate document would be the table of fees and expenses found in every prospectus. Requiring a new, separate disclosure document at the point of sale and at confirmation would duplicate information already found in the prospectus, create confusion as yet another document is thrown into the mix, and reduce the likelihood that consumers will read the most important source of information on the product -- the prospectus. Instead, the SEC should focus its efforts on g etting consumers to carefully read the prospectus they receive.

Finally, a disclosure that only discusses an investment's fees and expenses will lead people to focus on the investment's costs rather than its overall returns. After all, which is the better investment -- one with low costs and a net annual return of 2 percent, or an investment with twice the expenses and a net annual return of 6 percent?

For these reasons, I urge the NASD withdraw the proposed rule.

Thank you for your consideration of my views on this matter.

Peter M Viliesis, CLU, ChFC
Senior Consultant, Charon Planning
2110-A Boca Raton Dr.
Suite 204
Austin, TX 78747

Phone: 512.280.3223

Securities and Advisory Services offered through NFP Securities, Inc., a Broker/Dealer and Member NASD/SIPC.

Office of Supervisory Jurisdiction:
2600 Kelly Road, Suite 300, Warrington, PA 18976
Phone: 267-482-8300, Fax: 267-482-8243

Charon Planning is an affiliate of NFP Securities, Inc. and a subsidiary of National Financial Partners Corp., the parent company of NFP Securities, Inc.