To whom it may concern:

I am a Registered Representative in Fairmont, MN. I sell mutual funds, among other investments. I am under the understanding that there is a proposal to eliminate 12b-1 fees for mutual funds. I want to express my opinion on this. I am strongly opposed to this action. The amount of money that people in my profession make from 12b-1 fees is very little. On average it is about $1.50 per $1000 in a fund, per year. So, if I have a client with $10,000 in a fund, I make $15 a year. It isn't much.

I am in full agreement that there needs to be some clean up in the mutual fund industry. There are companies who have had people doing unethical things such as late trading and market timing. I don't know who is to blame and I don't really care. I would rather spend resources finding solutions to problems than finding blame. Don't get me started on the 9/11 Commission. The free market system will take care of some of these problems and already has started doing so. Putnam Funds, one of the more reported-on companies, had a terrible year compared to other fund families. This is due to the fact that their investors were pulling money out of those funds because of the allegations. I must admit, I have used Putnam for some of my clients in the past. However, they are now way down on the list of fund families offered. My Broker/Dealer, Transamerica Financial Advisors, has closed the Putnam accounts they offer in their retirement products. Like I said, there needs to be a change.

But, that change does not need to be the elimination of 12b-1 fees. That is one way Registered Reps make a living. That would be like saying that you could get a campaign contribution from someone one time, but not get anything else in the future, not even a little bit. Do you like getting a paycheck regularly? So do I.

I am not in this for the money as much as some in the industry. My number one objective is to do what is right for the client. I am a firm believer in that. If I make a good living along the way, that is a bonus. 12b-1 fees are pretty small and disclosed in every prospectus for every fund. Lets fix the problem, not take something away that didn't contribute to the problem.

Joe Kallemeyn