Subject: File No. S7-06-04
From: Adam D. Weeman
March 30, 2005
Dear Securities & Exchange Commission:
I am a licensed insurance and variable products advisor and am concerned about the above proposed rule requiring more disclosure regarding fees and expenses of Mutual Funds and Variable Products. These are unncessary as the prospectuses already address these issues. The SEC already reviews and requires these! This added form will provide no meaningful additional protection to consumers - only confusion.
Very recently, in 2002, the SEC took steps to simplify the contents of the prospectus. If you feel there are additional issues regarding the contents of the prospectus, focus your efforts on further revisions to the prospectus requirements; if you still believe consumers should be given a "one-pager," the appropriate document would be the table of fees and expenses found in every prospectus. Requiring a new, separate disclosure document at the point of sale and at confirmation would duplicate information already found in the prospectus, create confusion as yet another document is thrown into the mix, and reduce the likelihood that consumers will read the most important source of information on the product -- the prospectus. Instead, the SEC should focus its efforts on getting consumers to carefully read the prospectus they receive.
Finally, a disclosure that only discusses an investment's fees and expenses will lead people to focus on the investment's costs rather than its overall benefits. After all, which is the better investment -- one with low costs and a net annual return of 2 percent, or an investment with twice the expenses and a net annual return of 6 percent?
For these reasons, I urge the NASD withdraw the proposed rule.
Thank you for your consideration of my views on this matter.
Adam D. Weeman, CFPâ
Financial Consultant, Financial Network Investment Corp.
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