Subject: 12b-1 fees

July 11, 2007

To whom it may concern:

The costs investors pay to invest their dollars should be fully disclosed at the time they choose to invest their dollars and through vehicles such as prospectus's and annual reports on an ongoing basis.

The issue I would like to bring forth is not so much cost, but business model. In my industry their are many firms doing business on an investment advisory basis, where they are fully disclosing fees which are much higher than 12b-1 fees on mutual funds or other regulated SEC products including variable annuities.

If the client is finding value working with a financial advisor, brokerage house, bank, etc., they should be able to work with them. The issue of compensation/cost, i.e. business model, should be the decision of the consumer and the advisor, not the SEC or other regulatory agency.

Full disclosure should be the standard. This allows the consumer and advisor to have a discussion about how they will work together and what the benefits/rewards to each party will be/could be. If the client does not want to a high level of personal service, they can choose to deal directly with firms which are doing business this way. If they want to have frequent contact with an advisor in an office with imported exotic woods and stone from around the globe, they should have this option also.

In this highly competitive industry, if the playing field is leveled relative to full disclosure of cost(not uniformity or regulated cost), the communication of the benefits(marketing) of getting help with investing and planning, will allow the consumer to make up their own mind as to what type of help they want, and how much they want to pay for it.

Not everyone wants help, some want it, but don't want to pay for it, some will pay exorbitant amounts(with ancillary service), and some are very value oriented. Let the consumer decide what he/she wants. Let the provider implement a business model they want to work under. The consumer and the marketplace will decide the outcome.


Todd W. Knutsen, CLU, ChFC

North Star Resource Group