June 16, 2004
I would like to add my support to the many comments in opposition to the elimination of 12b-1 fees. Like many financial professionals, my husband and I provide financial services to middle class investors, mostly retired couples and individuals. Our investors do not typically make many changes once they have embarked upon a course of investing. Mutual funds make it easier for them to have diversified portfolios on limited assets. They do, however, like to have someone to talk to about their investments face to face. They would not ask the questions they need to ask if they had to pay a fee every time they call or come in to talk. Of course, we would still give them the time they need as long as we can stay in business. But when there is no income to cover the time spent, we probably will not be in business, and therefore not available anyway.
We are also a management resource to approximately 55 registered representatives who serve investors who are not particularly wealthy, but are able to save and invest through their employer savings plans and through individual investment programs. Here again, mutual funds are often the most appropriate choices. The 12b-1 fees help compensate the representatives for the time needed in helping educate these investors, who are often too busy working and raising families to pay much attention to their investments.
Thank you for the opportunity to share our concerns.