Subject: File No. S7-06-04
From: John P Andrew

March 3, 2004

By eliminating 12b-1 fees -- our residual fees, you are doing the same thing as eliminating social security

All that will be created by the elimination of 12b-1 fees is that the investment industry, in my opinion, will see a lot more flipping of funds.

12b-1 fees help pay our overhead fees. Plus, since we have not had a payout increase on mutual funds in many, many years, our payout on our sales are not keeping up with inflation. Fine, if they want to cut 12b-1 fees, then raise the cost of doing business. Dont make our payout on sales charges the same as they were 15 years ago. Lord knows your job has had a cost of living adjustment over the past 15 years. You would have been crazy not to propose a cost of living adjustment.

I think the focus should not be on the little guy - investment sales rep, but with the crap that is going on with the big brokerage houses.

This rule proposal will create more damage than good. I am all for full disclosure, but cutting our necks will not cause any good to come from the elimination of residual income that all of us have come to count on to help build or practices.


John Andrew, CRS