July 9, 2007
To Whom It May Concern,
I am a registered representative in Washington state and am writing to voice some serious concern over current discussions that would eliminate 12b-1 fees.
I understand that currently 12b-1 fees no longer serve their original intended purpose to market and assist in the growth of the mutual fund industry. However, I believe the 12b-1 fees now serve a different but equally important purpose and that is to foster an environment of ongoing advice between advisors and clients. I am a relatively new advisor, but in my short career I have come to realize that the public is completely tired of being "sold" financial products. The 12b-1 fees create an environment with true incentive for the advisor to maintain continued contact with their clients and to provide ongoing advice. Without the 12b-1 fees, advisors will be left with no incentive to continually service their clients and thus the financial services industry will become a sales based field. We shall literally be in a position to change our titles from "financial advisors" to "financial product salesperson." I don't feel that this form of a change advances my field in the direction that I would like to see it go and I am confident that the SEC does not want to aid an environment where a financial advisor may not always have their client's interests in mind.
Being that 12b-1 fees are serving a purpose different than that of their original intention I do believe adequate disclosure is important. I am adamantly opposed to the elimination of 12b-1 fees, however, I feel the SEC should look into creating new disclosure requirements with regards to mutual fund sales that more adequately addresses 12b-1 fees. I always make sure my clients are aware of the charges within their mutual fund purchases and I have found that when properly explained my clients are quite happy to pay 12b-1 fees. They have always expressed an appreciation towards a fee that assists relationship in which I will provide ongoing advice.
Sincerely,
Aaron Marberg