Subject: File No. S7-15-10
From: Hunter Bailey
Affiliation: Owner/advisor, Wealth Strategies

September 1, 2010

Comment on 12b1 fees

To Whom it may concern,

Regarding the proposed changes to the fees. I am in the process of converting my practice to fee basis specifically because of this change.

I normally create a brokerage account in order to combine several C share funds with the desire to diversify among management companies and simular funds. This company and fund diversification gave the client less risk of one company getting into trouble or redundancy among simular funds within that company.

With the C share account I kept the over combined expenses at or less than 1.5%, this is less than most managed portfolio combined expenses.

With the existing 12b1 fees paying me to service the smaller client a co-operative like program is created. Offering small clients an every-other quarter or yearly review. If the 12b1 fees for several small clients covered the servicing and advisor meetings collectively but less often I could maintain staff to be available for the group of small clients when they call my office.

Now as I convert my practice and analysis the cost of servicing investors more monthly and quarterly I can not afford to work with the smaller client.

A $25,000.00 C share account paid me a gross of $250.00 (less if bond funds) per year, I could afford one yearly client meeting and servicing.

However in the future if that revenue drops to $62.50 per year I can not even afford to provide administrative servicing for the account.

This new ruling will eleminate an advisor`s focus on the small client with hopes of future investments or referral possibilities, to the "here and now" revenue stream of the bigger clients.

I recomend that the existing C share remain in force with more disclosure. As for future C share accounts if you change the length of the additional fee at least the client is informed and can make thier own choice.

Keep in mind however if the client is in a position to negotiate the fee, if they are that into the process why do they need an advisor? C shares are for the client who wants to retain a long term advisor relationship while having the ability to fire the advisor and switch to a different advisor if the servicing effort deinish.

This is the most power a small client can have. No A/B share commission paid to an advisor who won`t return thier call but a revenue stream of income for which ever advisor who services the client and provides the attention he/she desires.

Mr. Hunter Bailey
Wealth Strategies