August 29, 2010
I am a 15 yr veteran of the financial services industry. Almost half of my career was working for one large institution, previously known as Painewebber. In years past 12b-1 fees were designed to help financial advisors market mutual funds and support their business to continue selling mutual funds. I have been an independent advisor for 8 years and I have sold all classes of mutual fund shares, including no loads. However, during this time, it has cost me on average $50,000 per year to run my office and service my clients. The support these fees give me, has allowed me to maintain a process and service commitment to my clients with out being forced to find new investments just to create more sales commissions to support my office. Recently, there has been a perceived disconnect between mutual funds and advisors. The pressure from the gov`t to control investment fees has turned the mutual fund industry against those who sell for them. In order to reduce fees,they are trying to paint a picture of the advisor industry as being overpaid. Meanwhile, they are trying to avoid "sub transfer agent fees" from being disclosed and don`t disclose what they actually pay their managers to run the money in those mutual funds. After the recent 2008 correction, my office has noticed that many mutual fund families have actually raised their expense ratios to keep revenues in line with pre correction levels. At the same time, they have systematically reduced advisor commissions and payouts. This seems to be going on unchecked while the attention continues to be directed at the financial advisor. My goal is to ask that you protect my revenue stream of 12b-1s that I use to meet my ongoing commitments to my clients and find other ways to control investment costs through required full disclosure methods and controls which will not give mutual funds the freedom to adjust their own revenue once they have my clients money, while at the same time reneging on their implied commitment to pay financial advisors who invest alot of their own resources to market mutual fund products. I believe these regulations are being used as a way for the mutual fund industry to increase their profits now that they have the ability to support their own revenue streams. This advisor sees this as an abuse of the gov`t system. Investment expenses should be controlled but not at the expense of financial advisors who have worked and invested years to be successful.
Thank you for listening.
Mr. Nicholas Trifiro
Financial Executive
Investacorp
43 Black Cedar Drive
Rochester NY 14624