July 20, 2007
I am writing to express my concerns about the SEC's ongoing review of Rule 12b-1. With nearly 40 years in the financial services and securities business it has been my experience that client outcomes are greatly enhanced by the relationship over a long period of time with a financial advisor. That relationship is fundamentally based on fair and unbiased compensation that is not dependent on new investment or investment changes. 12-b1 fees allow the advisor to receive compenation in return for maintaining a quality relationship with their clients. Many firms like mine have built their business model on ongoing compensation versus commission based compensation from new transactions. It is my opinion that clients are best served from this model versus a model that encourages advisors to generate commissions. Full disclosure of these fees is appropriate and it seems to me exists now. The real issue to investors is successful financial results and those results will most often be more likely to occur if they have a long term relationship with an advisor or firm.
Middle class Americans need the continuing service, guidance and support that are provided by independent financial advisors to achieve their stated investment goals. 12b-1 fees provide a tax efficient means to support the continuing service which these clients require for successful investing. 12b-1 allows financial advisors to tailor a portfolio to their client's specific needs.
In conclusion, while it is reasonable to review the investor benefits of 12b-1 fees, it is obvious that the repeal of 12b-1 has the potential to cause great harm to thousands of individual investors who need the support and service of a trained financial advisor. As a result, I urge the SEC to allow Rule 12b-1 to continue to support my efforts to provide needed financial services to middle class American investors pursuing the financial goals.
Sincerely,
Mr Tom Dice
President
Dice Financial Services Group