Subject: File No. S7-06-04
From:Ryan W. Auge
Affiliation:

March 30, 2005

Dear Madam or Sir,

I write to you today to voice my personal beliefs regarding the proposed rule changes to mutual fund and variable insurance product fee disclosure requirements. I believe strongly that the design of the proposed changes is flawed, and it will not produce the intended protection sought for the investing public. In light of the SEC’s ongoing efforts to improve upon the communication of investment characteristics via prospectus by streamlining and simplifying the document, this rule will further dilute the importance of all relative information regarding an investment decision by adding one more piece of paper to an already intimidating process. Furthermore, the reporting of expenses is difficult to pinpoint precisely when one considers the entire cost of ownership of a mutual fund or other pooled risk. Turnover for example, may dramatically affect the real return on a mutual fund, and the associated expense is a very difficult variable to isolate in cost calculations. Or in another example, will theoretical or intangible costs and benefits also be included in this fee disclosure or only the explicitly defined risks such as expense ratio or sales charge? My feeling is that internal expenses of any investment product are inevitable, and can be justified through a long term assessment of that products performance, and objective research. Wouldn’t it be more effective to clearly define historical rates of return so as not to cause irrational expectations of future results? Or, wouldn’t the public be better served by reading the information they are currently being presented via prospectus? I believe they would. Please do not allow this proposed rule change to go into effect as it duplicates portions of an existing document rather than correcting that document’s existing shortcomings. I support the need for consumer protection, but I believe this is not an effective way to achieve that ultimate goal. Thank You for Your considerations.

Ryan W. Auge', Financial Services
Registered Representative of NFP Securities Inc.
D. Francis Murphy Insurance Agency, Inc.