August 14, 2007
Dear Sirs:
While I admit 12b-1 fees have changed from the originally intended purpose Please consider the following issues carefully prior to making any drmatic changes:
1- Regulatory Burden-I have been a financial advisor since 1982 and have seen many changes. We are being over-regulated. Regulations need to be more consistent and rationalized. In example:
1- I am limited to 250,000. in c-shares per fund family. I would then need to either choose another fund family to do c-shres or switch to a-shares. I actually have to manually calculate how much a client has in a fund family in c-shres prior to doing a trade!!!!!!!!!
2-I have to send an email to my compliance manager if I switch from one c-share fund family to another even after the typical 1 year cdsc time period is over. If a fund family does something stupid is it the right thing to have to switch to another fund in that family?
3-Total expenses paid by investors in c-shares can be alot lower than in wrap-fee accounts. Remember that a wrap fee can be charged in addition to the expense ratio of a fund.
4-How about closed end funds? In many cases their expense ratios are very high and they can be bought and sold at will.
5-12b-1 fees can be changed to "finacial advisor compensation". Are you going to limit wrap fee compensation or separately managed accounts? Why just 12b-1 fees?
Rick Balmaseda
First Vice President-Investments