Subject: File No. S7-06-04
From: Shareholders Service Group, Inc.

April 4, 2005

Jonathan G. Katz
Secretary, Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609

Regarding the proposed point-of-sale rule for mutual fund purchases:

We handle mutual fund orders for independent fee-only advisors who work directly for their clients and who receive fees from their clients only. They are not our registered representatives, and they receive no commissions on the fund purchases we handle for them. Therefore they shop for low-expense funds, purchasing only no-load funds or load-waived (net asset value) transactions of load funds, if allowed by the fund, just as self-directed individuals would do for themselves whenever possible. The advisors may or may not have discretionary authority over the client account.

We provide equal access to no-load funds and to load funds at net asset value, if allowed by the fund. Many load funds may allow net asset value purchases by fee-only advisors but not by the underlying clients for their own accounts. Our mutual fund list clearly identifies which funds are no-load funds and which are load funds. In many cases we receive a trailing fee from a fund company, usually 25 basis points or less, and in these cases we identify the fund as an NTF fund (no transaction fee) and we waive our transaction fees. Our customer materials also disclose which funds are NTF funds, and our transaction fee schedule shows our flat transaction fees ($25 or $35) for non-NTF funds.

We do not solicit orders, and we make no recommendations. We recognize the need to disclose any special incentives that may exist when a broker recommends a mutual fund, but rather than treating all mutual fund orders equally, we believe that there is a class of transactions that by their nature eliminate the conflicts of interest that commissions and special incentives may create: unsolicited orders. All brokers today identify all orders as either solicited or unsolicited, depending on whether the broker recommended the investment. If there is no recommendation, payments or special incentives cannot play a role in whether the customer purchases Fund A, Fund B, or no fund at all.

The proposed point-of-sale rule should therefore distinguish between solicited orders and unsolicited orders and allow an exemption to the disclosure requirement for unsolicited orders. Without such an exemption, fee-only advisors, who work only on behalf of their client and not for the brokerage firm, as well as self-directed individuals who do their own research and make their own investment decisions could find it difficult to place mutual fund orders, as the brokerage firm may have to block the order or find a new mechanism to deliver a disclosure which would have no impact on the customer's purchase. This burden could be greatest in the case of online unsolicited orders, which are usually the simplest and most cost-effective way for individuals and advisors to place orders with a brokerage firm, as many brokerage firms now allow a discounted transaction fee for no-load funds purchased online versus orders placed with a broker's assistance.

Our firm and others like ours offer the most efficient means for individuals to gain access to a wide range of mutual funds while receiving the benefits of professional, independent, unbiased advice. Requiring disclosure at the point of sale when there is nothing more to disclose would only add cost and complication to the transaction. The point-of-sale rule, if implemented as it stands today, would increase transaction costs without adding any meaningful protection for the type of individuals and advisors we serve.

Thank you for your consideration.

**************************************************** Peter Mangan
President & CEO

Robert O. Reed
Executive Vice President

Shareholders Service Group, Inc.
Brokerage & Custody Services Exclusively for Independent Financial Advisors
9845 Erma Road, Suite 312
San Diego, CA 92131