Subject: File No. S7-06-04
From: Sterling F Chappell, III
Affiliation: Compliance Officer, Amvest Securities, Inc

April 4, 2005

I believe the rule will significantly reduce the choices clients have in selecting investments. The forms will give the client more to read than he/she currently has in the prospectus. For example: in making a mutual fund or annuity sale we show the client three investment companies with various objectives and performance histories. For each of these companies we show A,B and C shares with a discussion of the fee implications of each. Using the proposed forms the client will receive 9 forms to be completed and as each form is 3 pages they will now have 27 sheets of paper to deal with. This is no better than the prospectus and is in my view more confusing.

The data revealed to the client in the proposed form is for the most part contained in the prospectus. The client would be better served by some modifications of the prospectus.

If a form is ultimately required it must be part of the prospectus and the client must be made to sign it for proof that the broker/dealer revealed all the required information about fees, conflicts of interest and incentives.

REDUCING CLIENT CHOICES: As a mutual fund retailer we will have to select probably no more than five companies we will represent if we have to prepare forms for each fund and each class of fund. We will not be able to handle all the combinations for the many companies we now present to clients. Our inventory of forms will become unmanageable so we will reduce choices. The client will be required to come to our offices for sales since we cannot carry all the forms for all possible combinations of sales if we make a presentation in the clients home as we currently do.

529 PLANS: If the forms are introduced we will no longer consider 529 plans for our clients. The current requirements have caused us to suspend offering because they are classified as municipal securities. For the state of Ohio the mutual fund is a no load so no commission can be received, i.e. we will never offer 529 plans on which we cannot make a commission. Additional forms only strengthen our resolve to avoid these investments for our clients. The investment choices with 529s are already so restricted that I do not consider them to be in the clients best interest. The proposed forms only make them moreso.

VARIABLE LIFE AND ANNUITY PRODUCTS: The forms serve only to confuse the client. When we present a client with an annutiy, for example, we offer an asset allocation program within the annuity in which the client selects at least 10 subaccounts. I understand that the client will receive a form for the annuity itself and for each mutual fund subaccount so for 10 subaccounts the client will have to complete 11 forms and get 33 sheets of paper.

INCENTIVES: It is already against SEC and NASD rules for brokers to offer incentives to clients for purchases. Why do we have to reveal to them that we are not doing that which is not allowed? It is already against the rules for us to receive incentives from investment companies; why do we have to reveal to clients that we are not doing that which is not allowed? Cannot the prospectus contain this information without another form and three sheets of paper?

1. Establish a safe harbor form that the client must sign. If you do not, we will.
2. Include the form with the prospectus in triplicate, with one for the client, one for the broker and one for the investment company.
3. Move the fees back to page 1 and 2 of the prospectus as has been previously required.

In closing, I believe your efforts at a form are misguided. Clients do not buy mutual funds on the basis of fees nor choose one over another on the basis of fees. They look at historical performance as a guide for the skill of the managment they are investing with. Fees are secondary. If two funds have similar performance we offer the one having lower management fees. It does not matter to us what class the client selects. Over a period of years the commission we receive is essentially the same for each mutual fund and each class.