2004 Journal of Financial Planning Call For Papers Competition

John H. Robinson
Hawaii Wealth Management
220 S. King Street, Suite 1400
Honolulu, HI 96814
jrobinson@wachoviafinet.com
(808)564-0654

About the Author:

Mr. Robinson is a Managing Director and Branch Manager of an independent financial planning and investment firm in Honolulu, Hawaii. He has been a Financial Advisor since 1989.

CATEGORY OF ENTRY: Future of the Profession

TITLE OF MANUSCRIPT: Share Class Warfare: A Counter Perspective on the Legitimacy of 12b-1 Fees and Other Regulatory Issues Facing Broker-Distributed Mutual Funds

Abstract

Full-service fund companies and the brokerage firms that distribute them are currently under intense regulatory and legislative scrutiny over issues including 12b-1 fees, breakpoints, disclosure, and over-diversification. This paper addresses these issues from the investment professional's perspective and evaluates them in the context of proposed reforms. In doing so, the paper asserts that the politicization of the reform process and an overemphasis on fees may lead to ill-conceived regulations which are profoundly detrimental to investors who value professional investment guidance. In defending the value of 12b-1 fees, the paper suggests that the public interest would be better served by placing greater emphasis on reform measures that align client and advisor interests and preserve investor flexibility.

Share Class Warfare: A Counter Perspective on the Legitimacy of 12b-1 Fees and Other Regulatory Issues Facing Broker-Distributed Mutual Funds

Due to improprieties at several major mutual fund companies and the recent spate of scandals in the investment industry in general, the mutual fund industry is currently under siege from virtually every applicable regulatory authority. While both full-service and direct-marketed no-load fund companies are under fire for abuses related to market timing, late trading, and preferential treatment given to institutional investors at the expense of retail investors, full-service fund companies and the brokerage firms that distribute them are experiencing particularly intense regulatory and legislative scrutiny as the scope of the initial investigations has expanded to include issues such as breakpoint abuses, "over-diversification", improper disclosure of sales charges and expenses, and the legitimacy of 12b-1 fees. To date, several states' Attorney Generals, the NASD, the SEC, and the U.S. Senate (through the introduction of the Mutual Fund Reform Act (MFRA) of 2004) have all issued harsh criticism of the full-service mutual fund and brokerage industries, and are calling for major reforms.

The most vocal and visible of the states' Attorney Generals and the individual credited for initiating the investigations into mutual fund industry abuses is New York State Attorney General Elliott Spitzer. In his November 3, 2003 testimony before the U.S. Senate Governmental Affairs Committee Subcommittee on Financial Management, the Budget, and International Security, Attorney General Spitzer issued scathing criticism of both the mutual fund and brokerage industries, and called upon the SEC and Congress to enact a broad range of reforms, the cornerstone of which is a reduction of the "exorbitant" fees paid by mutual fund shareholders.i Attorney General Spitzer, in other public statements, has also been openly critical of the SEC and the NASD for failing to properly oversee the investment industry. In responding to such criticism, both the SEC and the NASD have been increasingly vocal in their criticism of the investment industry and are moving quickly to enact changes aimed at curbing abuses, eliminating conflicts of interest, and restoring public confidence. In an open meeting on February 11, 2004, the SEC unanimously approved a package of rules designed to eliminate breakpoint abuses, improve point-of-sale disclosure to mutual fund investors, and curb potential conflicts of interest arising from the distribution of mutual fund shares. The SEC has also proposed and is seeking public comment on a rule prohibiting the use of brokerage commissions (i.e., 12b-1 fees) to finance distribution of investment company products.ii For its part, the NASD spearheaded the investigation into the widespread failure of brokerage firms to provide breakpoint discounts to shareholders who made volume purchases of mutual funds, has been instrumental in requiring member firms to reimburse clients who were overcharged, and has extracted settlements from dozens of member firms for permitting breakpoint abuses to occur. The NASD has also been increasingly proactive in calling on member firms to make sweeping changes to their mutual fund distribution policies. Lastly, the publicity and furor surrounding the scandals and investigations has spurred the U.S. Senate to introduce a bill that "restores truly fiduciary fund governance, simplifies fund fees, confronts trading abuses, creates a culture of compliance, and eliminates the conflict riddled shadow of transactions that drive up costs".iii This bill, titled the Mutual Fund Reform Act of 2004, proposes similar reforms to those enacted and proposed by the SEC, including the repeal of SEC Rule 12b-1.

Clearly, major reforms are in the offing. Although most Financial Advisors applaud measures that restore public confidence in the investment industry, eliminate conflicts of interest, and afford increased protections to their clients, it is increasingly apparent that the politicization of the reform process due to the populist appeal of fee reduction may lead to hastily conceived or ill-conceived public policy which is profoundly detrimental to millions of investors who value professional investment guidance. That the outcome of the reform process may have far-reaching implications on financial planning and investment consulting practices makes the input of investment professionals all the more critical to the policy debate. Unfortunately, to date at least, it does not appear that Financial Advisors' views on proposed new securities laws and regulations have been articulated or that their perspective has been seriously considered.

As such, the purpose of this paper is to address some of the major issues surrounding mutual fund sales and distribution practices in the context of proposed reforms from the Financial Advisor's perspective. This perspective differs considerably from that of the regulators because (1) it recognizes that many investors value and are willing to pay for professional guidance, and (2) it emphasizes solutions which better align Financial Advisors' interests with those of the client, rather than focusing almost exclusively on fee reduction. In particular, this report examines the legitimacy of 12b-1 fees, and asserts that the implementation of current proposals by the SEC and Congress to repeal Rule 12b-1 would represent a major step backward for clients of full-service investment firms. The repeal of 12b-1 -- by eliminating the fee-based mutual fund share class and forcing full-service brokerage clients to buy only commission based mutual funds -- would create greater potential for conflicts of interest and would seriously diminish the ability of Financial Advisors to effectively monitor client portfolios. This report also evaluates each of the major broker-distributed mutual fund share classes (Class A, B, and C) as they relate to the distribution abuses and conflict of interest issues that have plagued the industry. A review of such analysis demonstrates that the share class option that best aligns the interests of the advisor with that of the client and which provides the client with the greatest flexibility is Class C shares. This perspective runs directly counter to proposed regulations which would eliminate C shares as an investment choice. Lastly, in its conclusion, this report discusses alternate solutions for reforming mutual fund sales distribution practices.

Overview of the 12b-1 Fee Controversy: Broker-Distributed vs. No-Load Mutual Funds - A Loaded Debate

A significant part of the controversy surrounding mutual fund 12b-1 fees undoubtedly stems from a fundamental misunderstanding of the purposes of fees associated with fund distribution (i.e., fees that are separate from a mutual fund's operating and management expenses). Although all mutual funds are governed by the provisions of the Investment Company Act of 1940 and are regulated by the SEC, the industry is broadly and unofficially divided into two distinct and competing categories based upon how their shares are distributed. In one category are "no-load" mutual funds whose shares are marketed directly to the public through media advertising and through marketing agreements with discount brokerage firms such as E*trade and Charles Schwab. In the competing category are broker-distributed mutual funds whose shares are marketed primarily through a wide range of brokerage houses, insurance companies, and banks. Since investors usually acquire broker-distributed mutual funds with the assistance and advice of a Financial Advisor, the fees associated with these funds (i.e., up front sales charges and/or 12b-1 fees) tend to be higher than the fees associated with acquiring and owning no-load mutual funds. Simply put, while no-load mutual funds offer a legitimate alternative for cost-conscious, do-it-yourself investors, other investors value carefully conceived financial planning and asset allocation advice, and are willing to pay higher fees associated with broker-distributed mutual funds for such guidance.

Most Financial Advisors, and, presumably, their clients understand this distinction. However, acknowledgement of this fundamental difference is entirely absent from public comments and congressional testimony provided by Attorney General Spitzer and by SEC Chairman William Donaldson. This suggests not only a major communication gap, but also that the views of policy makers appear to be stilted in favor of the interests of no-load mutual funds companies. In his November 3, 2003 comments to the U.S. Senate Subcommittee on Financial Management, the Budget, and International Security, Attorney General Spitzer even suggested that his views have been influenced by his "good friend Jack Bogle" - a well known leading advocate of no-load mutual funds and founder of The Vanguard Group fund family. In his testimony, Mr. Spitzer suggested that a significant reduction in fees is one of the most important keys to reforming the mutual fund industry, and that "fees that are paid by the mutual fund shareholders - seem to defy the laws of economics".iv His adamancy on this stance subsequently influenced the SEC to adopt a similar position on the elimination of 12b-1 fees. That current proposals aimed at eliminating 12b-1 fees are heavily influenced by the views of the no-load fund industry is undeniable. In another example, the language in a white paper description of the Mutual Fund Reform Act of 2004, as posted on the website of one its sponsors, Senator Peter G. Fitzgerald (R.-IL), is unabashedly antagonistic toward broker-distributed mutual funds and refers to the conspicuously biased Vanguard Founder Bogle as an "industry savant".v

While the concept of lowering or eliminating fees obviously has broad public and political appeal, the unspoken assumption that the regulatory authorities are making is that there is no value being provided to shareholders in return for these fees. Allowing the debate over mutual fund reform to be framed on these terms completely discounts the value of planning and asset allocation guidance investors receive from Financial Advisors. Clearly, current proposals to reduce or eliminate mutual fund expenses, most notably 12b-1 fees, will have a far greater impact on broker-distributed mutual funds than on no-load mutual funds. The fact that the interest of investors who value and are willing to pay for professional guidance may be seriously compromised by the elimination to 12b-1 fees is a legitimate argument that has yet to be raised.

Demystifying Those "Subversive" 12b-1 Fees

As with the distinction between the two distribution systems, there also seems to be a disconnect between the investment community and the regulatory authorities over the role of 12b-1 fees. The simple fact that the Attorney General of the State of New York, the SEC, and Congress are all advocating or proposing the elimination of 12b-1 fees suggests that investors receive no value or service for the fees they are paying. In unveiling the Mutual Fund Reform Act of 2004 to the public, Senator Fitzgerald did not hide his view that 12b-1 fees are a subversive blight on the investing public when he said, "12b-1 fees have largely degenerated into disguised loads which are as high as 1 percentage point per year".vi

Part of this perception problem seems to stem from a lack of understanding of how 12b-1 fees have evolved over time. As noted in Senator Fitzgerald's white paper, Rule 12b-1 was initially introduced in 1980 by the SEC to permit investment companies to raise marketing and distribution monies and to segregate these charges from the operating expenses of the fund companies.vii This change was initially a boon to the fledgling no-load fund industry, which used the fees to pay for media advertising and to compensate discount brokerage firms and 401(k) providers for including their funds in their offering lists. Initially, the standard 12b-1 fee was 25 basis points. Broker-distributed mutual fund companies also began paying 12b-1 fees to the firms that distributed their funds. The justification for these fees was that a % 12b-1 fee paid as an annual trailing commission to brokerage firms would encourage Financial Advisors to monitor their clients' mutual funds and would better align the Advisors' interests with their clients' by providing a monetary incentive to resist the temptation to switch funds in order to generate new commissions.

Although the standard 12b-1 fee on most no-load funds and Class A share broker-distributed mutual funds is still 25 basis points, competition from the growing no-load brokerage industry in the early 1990s and the growing popularity of fee-based planning led most broker-distributed fund companies to introduce new mutual fund share classes that gave investors alternatives to the traditional commission-based (i.e., the up-front sales charge) means of purchasing mutual funds through a Financial Advisor. These new fund types were created through the existence of SEC Rule 12b-1. Instead of charging investors an up front sales charge for purchasing mutual funds, investors now had alternative ways of paying for professional advice. The standard 12b-1fee on these much maligned investment alternatives was and is 1%.

Objectively speaking, it is difficult to argue with Senator Fitzgerald's claim that the use of 12b-1 fees today differs from the SEC's intended purpose at the time Rule 12b-1 was created. It is also easy to see how the use of 1% 12b-1 fees in distributing mutual funds could be perceived as subversive, particularly if funds with such fees are presented to investors without proper disclosure or if they are presented as if they are low cost no-load funds. However, such misrepresentations are already addressed by NASD and SEC regulations, and disclosure of 12b-1 fees is required by prospectus. Financial Advisors are also required to disclose to their clients all fees associated with purchasing mutual funds. While one can certainly make a valid case for more stringent disclosure requirements (such as those currently being implemented by the SEC and the NASD), before 12b-1 fees are repealed, consideration should at least be given to the possibility that 12b-1 fees have evolved to serve a legitimate beneficial function for investors. Furthermore, regulatory criticism that 1% 12b-1 fees are excessive and exorbitant fails to recognize that millions of investors believe it is reasonable to pay 1% per year for sound financial guidance. Indeed, the rapid growth of brokerage wrap-fee accounts (e.g., managed accounts and fee-based trading accounts) over the past decade effectively refutes such criticism

Despite the fact that SEC Rule 12b-1 was initially created to help the no-load fund industry, the abolishment of 12b-1 fees would once again be a boon for the no-load mutual fund industry. Now well established, the major no-load fund companies could replace offset the loss of 12b-1 fees by raising management fees and/or by directing their trading activities through discount brokerage firms with whom they have distribution agreements. Conversely, broker-distributed mutual fund companies can expect to see sharp declines in fund inflows if they are only permitted to offer commission-based share class options. Most importantly, investors desiring objective guidance will undoubtedly suffer if fee-based broker-distributed fund options (e.g., Class C fund shares) are eliminated, while existing holders of broker-distributed mutual funds of all share classes can expect declines in the quality of service if their Financial Advisors are no longer compensated for monitoring their fund portfolios.

Evaluating Broker-Distributed Fund Classes - The Case for Fee-Based Share Options

The broker-distributed mutual fund industry is under fire for a host of issues beyond just 12b-1 fees. The failure of many brokerage firms to grant clients sales charge breakpoints on volume purchases, over-diversification (i.e., allocating client assets across a range of different fund families to avoid sales charge breakpoints), and the failure of some Financial Advisors to properly disclose the fees and expenses associated with fund purchases have all aroused the ire of regulators and the investing public. Most Financial Advisors would agree that such ethical lapses should be corrected and that regulatory measures aimed at eliminating the potential for such conflicts of interest to occur should be pursued. Ironically, by concentrating on fee reduction as the cornerstone for reform, the regulatory authorities are taking a step backward by creating far greater potential conflicts of interest than exist today. To understand this better requires an understanding of how the different broker-distributed mutual fund choices work and the history behind their creation.

Prior to the 1990s, Class A shares were the only available type of broker-distributed mutual fund, and up-front sales charges were frequently set at the maximum allowable level of 8.75%. However, the growing popularity of no-load mutual funds in the late 1980's (due in part to the creation of SEC Rule 12b-1) led first to a reduction in maximum sales charges across many fund families from 8.75% to 5.75%, then to the creation of an entirely new class of fund shares, commonly known as Class B shares. Though unstated in mutual fund literature, it is widely understood that the contingent deferred sales charge structure of Class B funds was conceived to compete directly against the no-load funds (i.e., the funds were made to look and "feel" like no-loads). Although this share class was and, to some degree, still is a popular choice in the broker-distributed fund industry, many Financial Advisors agree with the criticism that Class B shares simply "bury" the up-front sales charge in higher 12b-1 fees, and that disguising the up-front commission that is paid to the brokerage firm in this fashion is intrinsically misleading to investors. The fact that B shares, like A shares are still commission-based, at the very least, creates the potential for misrepresentation. In addition, B shares also create the potential for breakpoint abuses, since, unlike A shares, there are no applicable discounts for volume purchases. Abuses in this area are well-documented and most major investment firms, at the urging of the NASD, have enacted policies to eliminate such unsavory practices by limiting the amount of Class B shares an investor may purchase and by limiting the number of different broker-distributed B share fund families a Financial Advisor can recommend to his or her clients (thus eliminating over-diversification abuses).

The third major type of broker-distributed mutual fund shares created, Class C shares, was not necessarily introduced out of any greater sense of altruism, but its origin and function are indisputably nobler. In the early and mid-1990s, the financial media and the investing public were increasingly critical of the conflicts of interest inherent in commission-based financial planning (i.e., Class A and B fund shares), and were increasingly supportive of fee-based planning alternatives. In response to this movement and as a result of demand from Financial Advisors, the mutual fund industry introduced Class C shares as a fee-based option. Through an annual 1% 12b-1 fee, Financial Advisors who were willing to forgo the immediate gratification of a higher up-front sales charge could now offer clients an alternative that is more objective and better aligns the Financial Advisor's interests with those of the client . Provided that proper disclosure of the 1% annual 12b-1 fee is made, Class C shares offer a valid planning alternative that is largely free from the conflicts of interest that plague the commission-based share options. Since many investors believe a 1% annual fee for objective financial planning and asset allocation guidance is both fair and reasonable, Financial Advisors can legitimately diversify client assets across a broad range of different fund types and fund families (i.e., no over-diversification issues). Further, if the Financial Advisor believes it is in the client's best interest to do so, he or she can objectively recommend switching from one fund to another. Unlike Class A or B fund switches, which may generate a second commission, Class C share fund switches for funds held longer than 12 months are free from such conflicts of interest, since the Financial Advisor's compensation is no greater with the new fund than with the old one. In addition, the 1% annual 12b-1 fee benefits the client by providing his or her Financial Advisor greater incentive to monitor the investments after the initial sale than the 25 basis point trailing fee paid on Class A or B shares.

The two major criticisms of Class C shares versus traditional Class A shares are (1) that Class C shares are more expensive than Class A shares for long term investors, and (2) diversifying client assets over a broad spectrum of mutual funds may result in higher fees than if the client concentrated his or her investments in Class A shares with a single fund family in order to receive sales charge breakpoints. The former claim, which has been invoked in various iterations a number of times by Attorney General Spitzer and by Senator Fitzgerald in their criticism of 12b-1 fees,viii, ix is supported by studies which have shown that, over longer periods of time, expense ratio differences between identical funds of different share classes (e.g., A vs. C) can lead to significant differences in performance. This claim is, of course, intuitive, since a fund with lower expenses will obviously have superior returns relative to an identical fund with higher expenses. The longer the time period, the greater the difference will be due to compounding. However, the critical flaw in this argument is that it does not accurately reflect the reality of investor behavior. In a widely quoted 2003 study entitled "Quantitative Analysis of Investor Behavior", the market research firm Dalbar determined that the average holding period for equity mutual funds is just 29.5 months and that investor holding periods have been declining over time. Other studies have suggested that the holding period for no-load funds is less than the holding period for broker-distributed funds. Although the wisdom of such short holding periods is certainly debatable, the economic reality is that, for many investors, C shares may, be a less expensive alternative than A shares, despite the higher 12b-1 fees. As for the "over-diversification" argument, the case against concentrating one's investments in a single fund family in order to obtain sales charge breakpoints can be summed up in a single word - PUTNAM. No single fund family has the best funds for all investor objectives and, as the Putnam example illustrates, there can be significant risk associated with concentrating one's investments with a single fund family.

In conclusion, a careful comparison of the three major classes of broker-distributed mutual funds should lead most observers to conclude that Class C fund shares better align the interests of the Financial Advisor with those of the client than the commission-based A and B share classes. Legislation and/or regulation that would eliminate 12b-1 fees would eliminate Class C shares as a planning option, and would clearly be detrimental to the interest of investors who value fee-based planning guidance. It should also be noted that wrap-fee mutual fund programs have recently emerged as a fourth alternative for advice-oriented investors. These programs permit investors to choose from a broad range of no-load and load-waived mutual funds. As with the C share model, these programs offer investors a viable fee-based alternative. One advantage of such programs is that, by providing access to both broker-distributed and no-load fund families, they offer investors a broader array of funds from which to choose. The repeal of Rule 12b-1 would undoubtedly spark a mass migration to mutual fund wrap fee programs. However, the fees charged for such programs vary from firm to firm, and total expenses in these programs tend to be higher than those of Class C shares.

Summary of Analysis and Recommendations for Regulatory Reform

The purpose of this analysis has been to examine the major regulatory issues facing the broker-distributed mutual fund industry and to evaluate the current proposals for reform from a Financial Advisor's perspective. The report concludes that the potential for conflicts of interest in the broker-distributed fund industry still exist and that efforts to reform such conflicts should be welcomed by Financial Advisors. However, the report also argues that the regulatory authorities have failed to recognize the fundamental differences between direct-marketed no-load mutual funds and the advice driven broker-distributed fund groups. The report concludes that the regulatory authorities' emphasis on eliminating 12b-1 fees, though politically expedient, is ill-conceived and could cause great harm to investors who value fee-based planning advice.

In terms of recommendations for reform, the analysis presented herein leads the author to suggest the following measures for consideration in addition to or in lieu of those proposed by the various regulatory authorities:

  1. Greater disclosure requirements for investors who purchase broker-distributed mutual funds. In addition to requiring the delivery of fund prospectuses to every investor, requiring clients to sign and receive a copy of a simple disclosure form listing all of the potential fees and expenses related to his or her fund purchases might vastly reduce the possibility for Financial Advisors to misrepresent or gloss over fund expenses. No-load fund companies should also be required to disclose fee arrangements with brokerage firms that distribute their funds.
     
  2. Eliminate Class B fund shares. It is difficult to justify the benefits of this share class versus Class A or C shares, and the potential for conflicts of interest and mis-representation make this share class expendable.
     
  3. Emphasize Class C mutual fund shares as the most appropriate share class for retail investors. It is widely accepted in the financial services industry that fee-based planning alternatives are more objective and afford investors greater flexibility to modify their portfolios over time than commission-based options. Class C shares are a fee-based investment option while Class A and B shares are commission-based.
     
  4. Introduce stricter punitive measures against firms and Financial Advisors who fail to properly represent their clients' interests. Enhanced supervisory procedures, greater disclosure requirements, and a zero tolerance policy for infractions should go a long way toward curbing mutual fund distribution abuses.

Review of Key Points

  • The major regulatory agencies have failed to recognize the fundamental differences between no-load and broker-distributed mutual funds.
     
  • Regulations and legislation aimed at reforming the mutual fund industry are heavily stilted in favor of no-load mutual funds, and completely discount the value of professional financial planning guidance.
     
  • The populist appeal of the call for fee reduction has politicized the movement to reform the broker-distributed mutual fund industry. Calls for the elimination of 12b-1 fees over-emphasize cost as a solution, and will cause immeasurable harm to investors who value professional fee-based planning guidance.
     
  • While it is true that the application of 12b-1 fees today differs considerably from the SEC's intended purpose, rather than blindly pressing for the repeal of Rule 12b-1, the regulatory authorities should at least consider the possibility that the unintended evolution of 12b-1 fees may actually benefit investors.
     
  • 1% 12b-1 fees on Class C mutual fund shares are not exorbitant. As evidenced by the spectacular growth of wrap-fee accounts over the past ten years, millions of investors believe that a 1% fee for professional guidance is both fair and reasonable.
     
  • The elimination of 12b-1 fees would represent a major step backward in the effort to protect investor interests and eliminate potential conflicts of interest. It is widely accepted among investment professionals and regulatory authorities alike that fee-based financial planning offers greater objectivity and fewer conflicts of interest than commission-based planning. However, the repeal of Rule 12b-1 would eliminate Class C shares as a fee-based planning option and would leave only traditional commission-based A shares for investors who wish to invest in broker-distributed mutual funds.
     
  • Ethical Financial Advisors welcome carefully conceived reforms aimed at reducing breakpoint abuses, improving disclosure, and eliminating potential conflicts of interest.
     
  • Class B shares have been at the heart of the breakpoint abuse scandal, the over-diversification issue, and the issue of Financial Advisors failing to properly disclose fees and expenses. It is difficult to conceive of a situation where B shares would be a better choice than Class C or even A shares. Abolishing this class of fund shares would dramatically improve the broker-distributed mutual fund industry.
     
  • Class C shares should be the preferred option among broker-distributed mutual fund classes. Class C shares better align the Financial Advisor's interests with those of his client. In addition, employing Class C shares enables the client to effectively diversify over a broad spectrum of different types of mutual funds, and provides the flexibility to painlessly change in the future as circumstances dictate. Class C shares also benefit the client by giving the Financial Advisor greater incentive to monitor his or her clients' investments over time.
     
  • The two most common criticisms of Class C shares - that they are more expensive over long periods of time than Class A shares, and that investors would be better served by concentrating their investments in a single fund family - are easily refuted.
     
  • Far greater activism is needed on the part of Financial Advisors and the major brokerage firms if there is to be any hope of reversing the advancement of investment policy initiatives that are profoundly detrimental to both the brokerage community and individual investors.

Regards,
John Robinson
Branch Manager & Managing Director
Hawaii Wealth Management
A Member of Wachovia Securities Financial Network, LLC
Central Pacific Plaza
220 S. King Street, Suite 1400
Honolulu, HI 96813
Office Tel. (808) 564-0650
Direct Tel. (808) 564-0654
Fax Tel. (808) 564-0651

The opinions expressed in this submission are those of John H. Robinson and are not intended in any way to represent the views of Hawaii Wealth Management or Wachovia Securities.


Endnotes