July 19, 2007

I am a licensed insurance and securities professional.

The focus of recent comments by SEC officials about the future of 12b-1 fails to support your stated goal of a more informed and better supported investor. The vast majority of mutual fund investors are neither sophisicated nor knowledgable about market investing. Frequently, there sole life line is a professional broker or representative who works to maintain asset allocations and manage market fear in bad times and market greed in good times. Without ongoing advise, investors may fall victim to churching funds and other fad schemes always available in the marketplace.

12b-1 fees are modest and relatively inconsequential. 25 basis points on $10,000 is $25 per year. Ending this modest practice will encourage brokers to move clients to more expensive wrap accounts or charge hourly or annual service fees much in excess of the current structure. Alternatively, investors will get less support which ultimately will accrue to their detriment .

Government can legitimately promote full disclosure. Government can never successfully protect investors from their own bad decisions. Recent reforms may make regulators feel better about their functions, but they do nothing to enlightened investors nor improve performance. My clients find the excessive paperwork created by well meaning regulations mind numbing. Bushels of paperwork does not help investors. Honesty and integrity in the sales process helps investors. And honesty can be assisted by regulations but can never be guaranteed.

Please do not further complicate a system that has serviced citizens well for over three generations. Promote disclosure, but stop interference in the marketplace.