From: Jeffrey M. Garell [mailto:fnclfrdm@pacbell.net]
Sent: Friday, May 28, 2004 3:01 PM
Subject: File No. S7-09-04

To Whom It May Concern: I am writing you to consider this point of view when making your decision about 12b-1 fees in mutual funds:

I am a fee-based advisor, providing, among other services, investment management advice for a wide range of clients. For many clients, investment management for a fee is appropriate and accepted by a client. However, some clients either do not want to pay fees for investment management, or it is economically not viable for me to offer one for smaller accounts. In these cases, I use C shares. My clients understand this form of compensation as the brokerage worlds version of a fee-based account. During the bear market, several clients decided they preferred having me manage their accounts on a C share basis because they had trouble justifying paying the quarterly fee as the market declined. Even after explaining that my compensation in C shares is similar to that of a fee-based account and their expenses are about the same as a fee-based account, several still chose a C share account. THIS OPTION GIVES INVESTORS CHOICE!!

The issue is not 12b-1 fees, the issue is disclosure. Please do not eliminate a legitimate option in the industry for many investors. While I am not in favor of over regulation, I would rather have the extra regulation, than lose the option.

For the sake of choice, and for the sake of the smaller investor who wants help from a financial advisor without paying a large load upfront or on the backend, please DO NOT eliminate 12b-1 fees. Thank you for your attention to my letter.

Jeffrey M. Garell, CFP, CLU
Registered Principal
Associated Securities Corp.
19100 Von Karman Ave. Suite 460
Irvine, CA 92612
(949) 223-5175
Member NASD/SIPC
California Insurance License # 0A28462

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