July 10, 2007
DEAR MS MORRIS,
AS BOTH STATE FARM INSURANCE AGENT AND A REGISTERED REPRESENTATIVE FOR STATE FARM MUTUAL FUNDS I AM CONCERNED OVER THE RULE TO ELIMINATE 12B-1 FEES.
THE 12B-1 FEE ACTS MUCH LIKE A SERVICING COMMISSION FOR MY INSURANCE PRODUCTS. WITHOUT THAT TRAILING SERVICE COMMISSION MY OFFICE WOULD CEASE TO EXIST. SOME PEOPLE MAY BELIEVE THAT'S OKAY, BUT CERTAINLY NOT THE CLIENTS WHO RELY ON PROFESSIONALS FOR SOUND ANSWERS AND SOLID ADVICE.
IN ADDITION, THE 12B-1 FEES ARE FAIRLY MODEST. A $10,000 INVESTMENT TYPICALLY CARRIES A $25 ANNUAL 12B-1 FEE. I WOULD VENTURE THAT THE VAST MAJORITY OF MY CLIENTS WOULD TRADE OUR HANDS ON ADVICE AND SERVICE FOR THE RELATIVELY MODEST FEE.
I TRULY BELIEVE MY CLIENTS ON BOTH INSURANCE AND MUTUAL FUND PRODUCTS FIND GREAT COMFORT IN MY OFFICE'S SERVICE. THE QUICK RESPONSE THEY RECEIVE IS REFRESHING IN LIGHT OF ALL THE 1-800 NUMBERS OUT THERE. LIKEWISE, MY CLIENTS APPRECIATE KNOWING THE PERSON ON THE OTHER END OF THE PHONE LINE.
FOR THESE REASONS, I WOULD ASK YOU TO REJECT ANY PROPOSAL TO RESTRICT OR ELIMINATE THE PAYMENT OF 12B-1 FEES TO REGISTERED REPRESENTATIVES.
THANK YOU FOR LISTENING!
JIM ROEHRENBACH, AGENT
STATE FARM INSURANCE