Subject: File No. S7-06-04
From: Gloria Vonderheide, ChFC

March 1, 2004

I have read comments that you are considering eliminating 12b1 fees. I strongly oppose this. I have been in business for over 25 years. I have a small practice that services middle income clients. Most of them have less than 100,000 with me. Here are my major reasons:

1 In the early years of my practice I received 8 commission on Mutual funds sales. I took a big pay cut in the mid 80s when fees were reduced to 5, but 12b1 trails were added. It has taken 20 years, but I now have built up a large enough base that the trails provide enough income that I can afford to spend the majority of my time providing service and reviewing financial plans. Becasue of the trail commission I very often will encourage clients that are not happy with the service they are getting to do a change of broker dealer. The client saves having to pay new brokerage fees. I know I will get paid for the service work in maintaining the account. I consider this to be the best possible way to handle things, for my client and for me.

2 As a financial planner I face regular costs. I have to prepare and print performance summaries. I have to take care of change of ownerships. I have to handle liquidations, transfers, change of addressess, calls from client accountants. I do all of this gladly in order to keep business on the books, and collect the trails. I feel that loss of those would hurt my ability to spend the time needed for client service, since I would have to spend more time finding new dollars in order to maintain my income.
There will be no way to continue to provide the levels of service I have been providing if I receive no service income. This is not in the best interest of the client.

3 Lack of regular income from business already on the books is only going to cause many fiancial planners to encourage more sales and purchases of new assets in order to maintain their income. There will be so insentive to service existing accounts. That is why trials were created in the first place. Lets not go back to the bad old days.


Gloria Von der Heide