Subject: File No. S7-15-10
From: David W Barrell
Affiliation: President, Barrell Investment Group, Inc

September 7, 2010

Some background: I've been in the investment business for 44 years, having learned the trade with Waddell Reed and at one time was in charge of 10 offices across upstate New York. For many years, we existed by bringing in new business, almost entirely with front end loads. The emphasis was always on opening new accounts, NOT on servicing old accounts. Then in the 80's the idea of a continuing service fee was introduced and at the same time all of the funds decided to reduce the up front charges. However, they did not reduce their share, the entire reduction came out of the rep's commision. In order to survive, we had to do more business and build up our trails.

It was a tough transition and I remember almost throwing in the towel in the fall of 1990. I persevered and kept building my practice with many small accounts while many of my competitors went after the high net worth folks. It worked out well as our small practice in rural New England has over 2000 accounts, only a handfull have more than $1,000,000. Our typical client has a couple of IRA,s and a joint account worth about $100,000 - $200,000. They add the $5,000 or $6,000 to their IRS's each year and are otherwise good savers. When they add $5,000, it costs me $20 in transaction fees with Pershing, who we clear through, and if I sold them a mutual fund with a C share I get gross dealer concession of $50. Our BD takes 10% and the average Rep payout is 55% or a net of $24.75 that leaves a small profit of $4.75 BEFORE a rep's cost of doing buisness, ie. EO insurance, registration fees and of course auto expenses.

The key to success has been to build one's book to a critical mass that makes it worth while to bring in the small accounts. A 1% trail does that and compares favorably to the typical 1.5% fee charged by fee only planners. If we lost our trails at the current rate, we would be forced to set up a billing system and charge a minimum 1% to stay afloat.

PLEASE don't force people like me out of the buisness. Our clients rely on us and don't want to be sent to call centers or 800 numbers to get information and service.
The mutual fund industry has an enviable record of being scandal free -- it has accomplished this with thousands of concientious reps selling a "piece of America" to those who otherwise would not become investors.

Thank you,

David W. Barrell
30 Fiddlehead Lane
Quechee, VT 05059