August 8, 2010
I already live to a fiduciary standard even though I'm only a Series 6 broker. What bothers me most is discussion of 12b1 fees. Series 6 are not allowed to charge any ongoing fee, so we live on two sources When an A or B or C share is sold, we get a portion of that fee, and our Broker Dealer takes half of that. Then the "trailer commission" or the 12b1 fee (25 basis points)is the ONLY income we get after the sale, and the Broker Dealer takes half of that. If you take away or reduce the 12b1 you can have my license because there will be no more income for Series 6 brokers. I've been licensed for 22 yrs now, have approx 160 clients, two of which have investments slightly over 100k, the rest have account balances far lower than that. Guys like me support the vast majority of investors with day to day service and support. No other broker wants these people, in radio ads around here, the brokers qualify they want clients with 50k minimum. In fact, in 2005 the SEC had articles printed in the WSJ that stated the vast majority of investors would be served better by going to a Series 6 broker instead of a 7 who charges fees over and above the expense ratio printed in any local newspaper. The large broker houses quickly stopped that idea and soon the SEC was informing the public that they should go to the fee for service model so they would be better served. That idea is clearly wrong and hurts us Series 6 people who do not deserve it. For once, make decisions that favor the consumer and those of us who carry the water for the industry.