Subject: File No. S7-06-04
From: Eric Flaten

January 31, 2004

Dr. Sir:

I would highly recommend full disclosure requirements of financial advisors and the like to have to disclose exact costs of all services, fees they are paid for buying/selling stocks, funds..........

The reason why is this, my financial advisor charges me 400.00 yearly to advise me on financial planning, making suggestions on investments, and then he does the paperwork for the investments. I basically just sign them and trust his judgment.

I realize I am responsible for determining my risk tolerance and the actual investment performance, but I dont know how to invest in a certain fund or whatever. Its why I lean on him for advice.

I keep hearing from my CPA, Suze Orman on TV, reading financial investment journals, books on the subject.... trying my best to understand to whole money thing and to wisely manage my whole financial picture as best as I can. OK, finally, here it comes. What I keep hearing specifically about life insurance is only do term insurance. The rest is a rip-off, I keep hearing. The broker/seller/advisor is making a killing and can easily hide it in the confusing mumbo-jumbo, going to the doctor like, financial rhetoric talk.

After I have maximized my retirement investments, he said the next thing to do is use variable life insurance as a tax free investment of after taxed dollars. This will protect my kids from paying too much tax if all I have invested is my TDA monies when I die. Sounds like a good argument for investment life insurance, right????

Of course, after the fact, I keep hearing the cons of this investment from very trusted multiple sources. The advisor did not mention the part he was going to make a killing off of me and it was an overall poor investment. If I had known what his bottom line off this investment would have been up front, I probably would have not done it.

I think to myself I am paying this guy 400.00 yearly for sound advice. It maybe more like 4000.00 a year for some poor investments. The problem now is I do not even exactly know how much I have been scamed, or if that was for sure what he did to me. All indications seem to say scammed, but how am I supposed to know?????

Sorry so long. I hope this helps you in your decision for mandatory complete and objective disclosure of all investment vehicle profits/commissions by sellers/brokers/advisors in this industry.

Thank You.

Eric Flaten