Subject: File No. S7-06-04
From: Janice K. Hobbs, MBA, CFP, CFCA

April 4, 2005

This is not a form letter. It is what I think about the proposed SEC regulations.

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

Re: SEC Proposal on Point of Sale and Confirmation Disclosures

Dear Mr. Katz:

The path you are going down is not helping investors! Yes, it would be a burden for me as a professional financial advisor to obtain signatures on more forms. Yes, it will tale time and cost money to document and store these disclosures. But most of all, it means I can't spend any time on the people who need my services the most, the small investor. The impact of all of these regulations is investors are getting the impression that all fees negatively impact the investor and the path to financial security is to avoid fees whenever possible.

The real issue is whether any fees are reasonable when compared to the product or service being provided. In our free market society, all firms have incentive to be efficient and minimize fees where ever possible. All of these proposals emphasize what the fees are but do nothing to educate the consumer on the benefits of the products and/or services they receive when they pay the fee. And fees are only an issue if there is not a corresponding value!

Why are securities being treated differently than all other products and services that are offered to consumers? If all medical procedures required a Point of Sale disclosure that only listed the fees without showing any relationship to the benefits, cancer would only be treated with prayer, and a severed finger would be thrown away rather than sewn back on. Surgery costs money. Education costs money. What is the value of quality of life?

Limiting C share investments to any arbitrary amount is like telling a patient they can have 3 fingers sewn back on in a lifetime but after that they must switch to prosthesis because the fees are less. And according to the SEC, lower fees are always in the best interest of the investor. Fortunately, the American Medical Association has not created an SEC like Point of Sale Disclosure for consumers to sign when they purchase health insurance. Given a choice of premium costs but not the corresponding levels of insurance coverage, consumers would logically conclude that paying less was in their best interest.

How about explaining to the investor what they get for different fees and let them decide if they want the product/service or not?

I have a major impact on my clients financial security. I help them with many complex financial decisions. I make sure the funds they invest in are worth the costs involved. My clients are not in a position to do a comprehensive cost/benefit analysis on every possible investment alternative. These new Point of Sale Disclosures are not disclosures at all. They are propaganda. They do not tell the whole story. If these new regulations are enacted, I would be put in a position of defending my recommendations when they don't coincide with the lowest fee alternative.

After 20 years as a Certified Financial Planner, I had accumulated over 400 clients by 2002. Since these new regulations have been coming out regarding A, B and C shares, breakpoints, disclosures, etc. I have let nearly 200 clients go. I can no longer afford to do business with anyone who has less than $250,000 in assets. If these new Point of Sale Disclosures are enacted, I will be forced to let another 75 clients fend for themselves. No other advisor will take them because it is too time consuming to go through this Point of Sale Disclosure exercise and then spend time explaining why they should be willing to pay for the products and services they need.


Janice K. Hobbs, MBA, CFP, CFCA

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