October 27, 2010
To whom it may concern,
I have been in the financial services arena and a registered representative for well over 35 plus years. I have only been with 3 differnt companies during that time and have watched carefuly as the regulatory environment has changed and how our industry has reacted and changed along with it.In reviewing "File Number S7-15-10 there are some issues or points that I am in agreement with and others NOT in agreement with. I DO like the name change from 12b-1 fees to 12b-2 as they are for sevice and marketing. It is my belief that reps should continue to be compensated for on going and continous service to their clients and for those they are expected to service. The on going 25 basis points really is a small fee compared to the service that is done on an annual basis.
I must admit I do find it very disturbing that the SEC is contemplating or permitting mutual funds to issue a new class of share that allow B/D's to set their own sales charges and commission amounts. Who wins on that? Certainly not the public or the vast majority at least. Who is going to supply the NEEDED and WANTED advice to the middle or lower market investors. A rep probably wont be able to send the time if he is trying to feed his family. He will need to spend his time with upper income investors who can afford assets under mgt fees or higher cost or higher service class of shares. IF you truly are watching out for the average american investor how is this helping them......really?
After watching the industry over the last 40 years I have watched mutual fund co's , banks and insurance company's compete for larger and larger market share at the cost of the "little guy". All the B/D's are going to do is lower their fees to gain market share, but, tell me who is supporting it at the cost of lower or no support and service.... middle and small investor that's who. Do they not have the same rights as upper income investors? So...what the rule will then do is in effect FORCE the smaller fund account to self-direct w/o advisors to guide and advise them or drive them to discount brokers. How do they benfit...who helps them.
I would like " WHOMEVER IT IS" to re-think this rule and attemt to keep in mind the race for market share as a race to the bottom not a race or flight to quality.
Thank you for your consideration