From: Victor Simon |
I would like to inform you that my firm focuses on serving the needs of middle American families and small business owners. I have structured my firm in the form of an scaled down version of a familiy financial office for most needed servces that middle Americans need in the following areas: Fianacial Planning, Investment Management, Risk Management, Banking, and Lending. Without 12b-1's my service platform for middle America collapses as I would be forced to start charging my clients extra hourly fees or higher management fees or a combination of both. The public response will be to avoid such and they really have no where to go for real, persoanl help and counseling by an accomplished veteran such as myself. As an RFC, ChFC and AIF...I put countless hours into education to be able to advise my clients properly. They depend on this in order to improve their financial quality of life. If I need to spend 50-60hrs per week in order to serve people correctly at my level even af ter 22 yrs...how in the world can individual citizens truly be safe in their circumstances with lives being as busy as they are and not even having acccess to allthe tools I do? As it is I do over 120 pro bono hours each year, just because people truly need help and can't afford to turn elsewhere to the people in our indusrtry that have resigned themselves to only worj=king with the wealthy. The following should add even more reasons to embrace the 12b-1 fees. .Expanding Investor Choice - The multiple share classes made possible by Rule 12b-1 give investors choices by providing them with options in how they pay their financial advisor. The flexibility offered by Rule 12b-1 allows financial advisors to tailor a portfolio to their client's specific needs. .Supporting Financial Literacy - Mutual funds send their investors monthly statements, confirmations, prospectuses, annual reports, and other materials. Financial advisors serve the vital role of educators by helping investors to make sense of these essential materials. 12b-1 fees are the compensation financial advisors receive for these efforts. .Managing Client Expectations - 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. .Insuring Small Accounts Receive Service - Investment advisory services are simply out of the reach of many small account holders. 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. .Subsidizing Additional Services - Independent financial advisors offer their mutual fund clients a variety of additional services including: consolidated account statements, periodic portfolio review meetings, quarterly newsletters, cost basis research, preparation of tax returns, and consulting on other financial decisions. These important services are made possible by the subsidy 12b-1 fees provide. 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 their financial goals. Sincerely, Mr Victor Simon |