From: Thomas S. Talbot |
I am writing to express my concerns about the SEC's ongoing review of Rule 12b-1. Potential and existing clients need the continuing service, guidance and support that are provided by independent financial advisors to achieve their stated financial goals. 12b-1 fees provide an efficient methode to support the service which clients require for successful investing. 12b-1 fees help provide: Multiple share classes by providing investors choices in how they pay their financial advisor. The flexibility offered by Rule 12b-1 allows an advisor to tailor a portfolio to the client's specific needs. Mutual funds provide investors monthly statements, confirmation of new deposits and current withdrawals, prospectuses, annual reports, and various educational information. Advisors serve the position of educators by helping investors to make sense of these essential materials. 12b-1 fees are the compensation financial advisors receive for these efforts. We all know the common mistakes investors make; buying high and selling low, chasing past performance and harboring unrealistic expectations. 12b-1 fees provide financial advisors with compensation to manage their client's expectations and protect them from falling into this common investor traps. Investment advisory services are simply out of the reach of most small clients. Financial advisors must have another means of being fairly compensated for servicing these accounts. 12b-1 fees provide the mechanism to insure small investors receive the support and service they need to achieve their financial goals. Independent financial advisors offer their mutual fund clients additional services which may include: consolidated account statements, periodic portfolio review meetings, quarterly newsletters, cost basis research, preparation of tax information, and consulting on other financial decisions. These important services are made possible by the subsidy 12b-1 fees provide. It is obvious that the repeal of 12b-1 will cause harm to thousands of individual investors who need the support and service of trained financial advisors. As a result, I urge the SEC to allow Rule 12b-1 to continue to support my efforts to provide financial services to investors pursuing their financial goals. Sincerely, Mr. Thomas S. Talbot |