Subject: File No. S7-15-10
From: Bill M Smith
Affiliation: owner small broker/dearler

September 1, 2010

Dear Ms. Shapiro,

As we review the comments regarding SEC proposed changes to 12b-1 fees, we see similar and repeated references to the harm that the changes will cause to the small retail investor. We echo those comments.

The proposal ignors that there is a basis to establish the fairness of the 12b-1 fees including the higher fees on C
shares. We know that the range for fee based accounts is
1 - 2+ per cent depending typically on account size. These are ongoing fees for the life of the account - why not cap them after 5 yrears.

The current 12b-1 fees are in range. They are not punitive to the investor nor do they constitute a windfall to the broker. Other than the disclosure/transparency issue, one could rightly wonder why we're even attacking the amount of 12b-1 fees paid.

The proposal inappropriately skips over the real abuse which is the front-end load on A shares. When given a choice between A shares and C shares, the client should
acknowledge the intent to keep the particular fund for as long as it takes to establish a lower aggregate cost than the equivalent C share. Ridiculous? Yes, but only in regards to the poor investment decision to hold a fund simply to create a cost advantage.

The SEC is stalking the wrong horse. The A share isn't the basis for comparison - it's the problem. I'm afraid that you have it backwards. Why wouldn't you require that the investors acknowldege that they are potentially disadvantaged by a short holding period for the A share, rather than making the C share a scape goat?

Somehow, it is in the secrecy governing variable annuity costs that the real abuses exist. Is there something about the constituency of the SEC advisory panel that we are missing? Do IRA's inside variable annuities really serve the investor. Where is the requirement for break points.
Why liquidate a perfectly positioned IRA to purchase an annuity? How many times should the investor pay for the
same fund purchase/repurchase?

Thank you for allowing comment on this proposal.