From: Erik M. Lindgren
I am writing to express my concerns about the SEC's ongoing review of Rule 12b-1. I have been a financial advisor since February 1998. In almost ten years, I have been able to build my practice from nothing to a client base of 175 clients. I meet with my clients two to four times per year to thoroughly review their investments, evaluate their progress toward their financial goals (most often this includes planning for college and retirement), and inform them of important events that may impact them financially.
I also must say that nearly, if not all, of my clients had worked with another financial professional at one time. However, they came to me because they were dissatisfied with the level of service that they were receiving. I have learned that many other financial professionals do not take the time and care for their clients such as I do.
Being an independent advisor, I pay for my own office and support staff, without whom my services would be difficult, if not impossible, to maintain. I feel that my clients see the benefit of the services that I provide, as I only acquire new clients through referrals. I continue to bring in 18 to 20 new clients per year through these referrals, which reflect the satisfaction of my clients.
I truly believe that the compensation I receive from 12(b)-1 fees enables me to offer this type of service to my clients. Many clients have remarked to me how happy they are that they found me. Before they met me, they had bouced from advisor to advisor, and could not make the most of their investments nor make optimal progress toward their financial goals.
As required by my broker-dealer, Royal Alliance, I fully disclose the expenses of any mutual funds I am recommending before the client makes a purchase. I am also required to disclose the differences between class A, B, and C shares of mutual funds. I feel that such disclosure is good and fair for the client.
I have built a practice of satisfied clients who receive excellent service and I who feel will be successful in achieving their financial goals. I am quite certain that thousands of financial advisors around the country are able to provide similar benefits to their clients.
While it is reasonable to review the investor benefits of 12b-1 fees, it is obvious that the repeal of 12b-1 has the potential to cause great harm to thousands of individual investors who need the support and service of a trained financial advisor. As a result, I urge the SEC to allow Rule 12b-1 to continue to support my efforts to provide needed financial services to middle class American investors pursuing the financial goals.
Erik M. Lindgren, CFP ChFC