July 19, 2007
I am a licensed insurance professional and mutual funds salesperson.
I believe the elimination of 12b-1 fees would do considerable harm to those investors who need and want ongoing investment planning advice and counsel. A significant majority of my clients expect our office to be available and to respond quickly to a variety of questions regarding their investments. I have never received complaints from my clients about the small amounts they are charged for the services I provide to them. My clients expect me to be compensated for helping them achieve their long-term financial goals. If 12b-1 fees were eliminated, while the client might save a small amount in 12b-1 fees he or she would end up paying a much larger amount in hourly or asset-based fees to receive the same service.
Living in a smaller community, all of my clients are of modest middle class financial status. There is very little sophistication among them and I have worked very hard to educate them and move them into the world of investing in mutual funds. They have been very excited about the new picture they see for their financial future and they are not resistant at all to the idea of paying a small percentage for competent help with their affairs from someone they know and trust. I really enjoy doing this for them. I've seen their financial hope factor rise nicely since getting involved with me. That is gratifying for all concerned.
As much as I enjoy this, if my own hope of financial compensation was restricted I would be unable to do this for my clients. For these reasons, I urge the SEC to reject any proposal to eliminate or restrict the payment of 12b-1 fees to registered representatives for providing continued service to their clients.
To force me to move to a fee-based process would seriously interrupt the personal touch and atmosphere of working together that we currently enjoy. I don't need to charge for my time under the current system but would have to keep track of my time and do billing if 12b-1 fees were eliminated. It ain't broke. Please don't fix it. Thank you for your consideration of my views on this subject.