July 19, 2007

I am a Financial Advisor and hold the CFP designation.

In return for providing ongoing service and continuing advice to my clients regarding their investments, I often receive trailing investment compensation in much the same way that I receive renewal commissions on the life insurance policies that I sell. This trailing compensation is typically paid under a written plan adopted pursuant to SEC Rule 12b-1.

The amount of this compensation is relatively modest; on a $10,000 investment in a mutual fund's "A" shares, the annual "12b-1 fee" that is paid for providing ongoing service equals 25 basis points, or $25. Investors receive substantial value for these fees--in exchange for a small annual payment, they have access to a financial services expert to answer their questions and address their concerns. Without their advisor, investors would have nowhere to turn to (except for perhaps a stranger at the end of a 1-800 phone number) when they needed some reassurance in a shaky market or assistance in rebalancing their portfolios, understanding their investments and the investment choices available. A change to this rule would require me to eliminate or substantially reduce the amount of advice and services I provide to my newer and smaller accounts.

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 and all compensation is fully and fairly disclosed whenever I enter into a new client relationship. 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. Again, I would also be forced to eliminate working with smaller investors who are just starting out and typically need more help and advocacy.

With the reduction and elimination of Pensions by many if not most large employers and with the solvency of Social Security in doubt, forcing new and smaller investors into a less helpful service model will not serve them. There needs to be adequate and just compensation to cover the overhead of my business which provides valuable and necessary service to those who want to have a personal relationship with an advisor and prefer to meet someone face to face.

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.

Thank you for your consideration of my views on this subject.