From: Torrey Holmquist
Sent: March 29, 2005
Subject: File No. S7-06-04

Torrey Holmquist
127 N Higgins STE 2
Missoula, MT 59802

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

Jonathan Katz:

If these do get read...

I understand what the SEC is attempting to accomplish. However instead of making more paperwork, and therefore more possible errors for reps to get sued over by the NASD, how about considering that additional paperwork should be required on sales over a specific amount - say $250K.

I work with middle income - mainly educators. These are the people Pres. Bush is urging to start saving more. With additional paperwork, it becomes more of a hastle (due to additional processing time vs. sales volume) to work with these kinds of individuals and therefore, fewer representatives will chose to advise lower income families.

If we need to save as a county, consider making things easier for the middle income investor and those representatives who enjoy working with them. Extra paperwork is not what is needed to protect investors - simple to read prospectuses are.

How about requiring Fund and Annuity companies to have a removable page from the prospectus that must be signed by a new client which outlines the fees and expenses. Then the burden is on the fund company to make sure they are in compliance with the SEC - and not have every representative try and remember all of the different expenses with each product offered.

We're already required to provide a prospectus, so include forms with them. It would remove the BD and representative form improper additional disclosure (if that is the goal) since these forms would be reviewed by the SEC.

But, maybe the SEC doesn't want to do all this extra paperwork either!

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.


Torrey Holmquist