From: T C [tcregion2003@yahoo.com] Sent: Monday, May 03, 2004 3:24 PM To: rule-comments@sec.gov Subject: File No. S7-09-04 12b-1 comments Dear Sirs: ]I am a manager in the financial service industry with over 80 financial advisers affiliated with my firm.I have followed with interest the unfolding events in the financial service industry and some of the proposed regulatory changes designed to combat some of the abuses that have occurred in the past. While I agree with the overall effort and some of the proposed changes, I wish to voice my opposition to the elimination of and/or any major changes to the 12b-1 rule. I have been in the financial service business for over 20 years and have seen how the industry has operated both before the rule was adopted and after. I firmly believe that todays consumer is better served in part due to the adoption of 12b-1 which has spread an advisor's compensation out over many years. The adviser is now incented to service the account and to maintain a long-term relationship with the client rather than only focusing on the initial up-front transaction. These 12b-1 fees move our industry closer to the "best practices" recommended by the Tully Commission and help to alleviate some of the past abuses in our industry. I also fear that the elimination of 12b-1 fees would be felt greatest by the small to mid-sized investor. Most advisers have repositioned their biggest accounts into RIA management types of accounts where the 12b-1 fee is not applicable. My advisers that focus on the middle class market would be impacted the most as they rely on the 12b-1 to help offset the cost of providing on-going service to their customers. I also have concerns about one of the proposed changes I have read about. I am opposed to showing an actual deduction of 12b-1 fees on each customers statement. I have no problem with disclosure but believe the accounting nightmare this solution would require would cost much more than the benefits obtained. If each client actually had shares liquidated to pay for the fee, similar to the way IRA fees are deducted now, it would place an undue burden on the consumer to have to account for the sales each tax season. As a consumer, the last thing I need is more tax complexity come April 15th. Thank you for the opportunity to share my thoughts. Sincerely, Terry Curnes,ChFC -------------------------------------------------------------------------------- Do you Yahoo!? Win a $20,000 Career Makeover at Yahoo! HotJobs