From: Tom Fayen |
The repeal of 12b-1 fees has the potential to cause great harm to thousands of individual investors who want 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 their financial goals. In short, as you know, there are 3 types of securities industry commission: (1) a large % charge up front that the client sees immediately with no/low 12b-1 fees and low CDSC (aka A share) (2) a large % charge up from that the client does not see unless they sell out of the family that has 12b-1 fees and high CDSC (aka B shares), and (3) a small % fee annually as long as the client owns the asset - a level 12b-1 fee (aka C shares). It has been my experience that the fees that attorneys charge are also very similar: It has been my experience, that the attorney that provides the best advice to their client is the one on a retainer. To equate that to the securities side, the registered reg that wants to mirror an attorney on a retainer basis is the representative who sells C class shares -- which is the share class that pays the MOST in 12b-1 fees! And this is what you want to eliminate? I am no policial expert, but if I were a betting man, I would bet the farm that the American people, if given the option, would almost ALWAYS prefer to pay ANY of their advisors on a retainer basis than the other 2 alternatives that are available. By eliminating the 12b-1, you are legislating AGAINST what what I believe Americans want. Sincerely, Mr. Tom Fayen |