April 28, 2004
Jonathan G. Katz, Secretary
Dear Mr. Katz,
I am a Certified Financial Planner, licensed to sell insurance and securities, including mutual funds.
I would like to address the efforts of the SEC and Congress to deal with unethical and illegal mutual fund industry practices.
But eliminating 12b-1 fees is not good.
Many of us financial professionals charge fees to help people with the complex and mystifying world of securities, taxes, and the ups and downs of the market. However, many are small investors with relatively small amounts invested and they are reluctant to spend $100 to $200 an hour for professional advice.
12b-1 fees are a way to provide the professional advisor with an incentive and compensation for ongoing advice and continuing the relationship with the client after an initial purchase. Usually these fees are in the .25 percent realm, or $25 for a $10,000 investment.
It is one way to make investing available to the small investor and at the same time provide the professional with an ongoing compensation for their efforts.
Clients expect and need ongoing support and are willing to pay for it, but appreciate not having a billing every time they call. They know their 12b-1 fees will provide compensation at a modest level and they do not complain.
I urge the SEC to reject any proposal to eliminate or restrict the ability of mutual funds to pay 12b-1 fees to registered representatives for providing continued service to their clients.
Richard G. Steinbrueck, F.I.C., CFP®
Thrivent Financial for Lutherans
Registered Representative for Thrivent Investment Management, Inc. 645 4th Ave. S., Minneapolis, MN 55415-1665, a wholly owned subsidiary of Thrivent Financial for Lutherans
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