Jun
23
2010
SEC Proposal to Reform 12b-1 Fees Looms Around the Corner
The SEC has announced that they plan to publish a proposal to reform Rule 12b-1 in June 2010. The proposal is intended to address the SEC’s concerns that the fees no longer serve their intended purpose of supporting fund distribution, represent additional sales compensation, and are poorly disclosed to clients.
The Professional Alliance is a member if The Financial Services Institute (FSI) and we have long held the position that Rule 12b-1 provides fair compensation to financial advisors for providing middle-class Americans with critical support and guidance in planning to achieve important financial goals ranging from retirement, to college funding for children, to caring for aging parents. We have vigorously advocated for the retention of 12b-1 fees as an essential way of aligning the interests of the advisor with the interests of their fund shareholder clients. For this reason, preserving 12b-1 fees for the benefit of small investors has been a top advocacy priority for FSI since 2007, when the SEC initially announced its intention to review Rule 12b-1.
In an effort to preserve 12b-1 fees, the Financial Services Institute has meet with senior members of the SEC’s staff and held meetings with each of the five SEC Commissioners in the last month. We are closely monitoring developments and will alert you as soon as the proposal is made public.
