From: Bryan Rex
Sent: March 31, 2005
Subject: File No. S7-06-04

Bryan Rex
728 Oxford Dr
virginia beach, Va 23452

Jonathan G. Katz
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609

Jonathan Katz:

What follows is the official response from my PAC. However, first, my own thoughts. If you are bold enough to call yourself an advocate of the end-user you will leave further disclosure documentation requirements off the table specifically as it relates to the SEC proposal to change rules regarding Variable Annuities and Mutual Funds. I know that Eliot has everyone running scared but somebody has to stop and use their brains even if he wont. The LAST thing my clients want to see is ANOTHER FORM. Those of us honest enough to make proper disclosure don't need another form to sign and file. Those who are dishonest will simply disregard your new law like they disregard the requirement to provide a prospectus. What makes you think adding one more form will make the client more inclined to sit down are read everything we are forced to put in front of them? We are going in the wrong direction here! And it is proposals like this one that are contributing to the confusion of the end-user.

I am a licensed insurance professional and variable products salesperson.

I am writing to you because the new disclosure requirements contained in the SEC's proposal regarding the sale of mutual funds and variable products are unnecessary and will provide no meaningful additional protection to consumers.

Mutual fund and variable annuity prospectuses, which are reviewed by the SEC, already discuss the fees, risks and expenses associated with the purchase of these products. 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 returns. 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.


Bryan Rex