Subject: File No. 4-538
From: Richard Tate
Affiliation: Registered Representative, FSC Securities

June 13, 2007

Although it is clear that 12(b)-1 fees are no longer primarily used for marketing purposes, the importance of having some means of compensating brokers for the servicing required on mutual fund accounts cannot be ignored.

Let me just speak to two issues in this regard.

First, The amount of 12(b)-1 revenue as a percentage of total compensation is likely to increase the longer a broker has been in the business. This is because both his client base and assets under management will likely grow over time. The amount of time spent servicing existing clients is likely to grow as well. I have been in the business for thirty years and I estimate that 90% of my time is spent meeting the needs of my existing client base. If 12(b)-1 compensation were not available for this, I would need to direct my attention to acquiring new business. It would be a cruel irony that those brokers who have the most experience and spend the most time servicing existing clients would be most hurt by the elimination of 12(b)-1 compensation.

Second, the dramatic increase in compliance related activity is not a cost that can easily be passed along to the investor. This is particularly true of the national security requirements of verifying customer identity and source of funds. Increasingly, brokers are being asked to serve as an extension of the homeland security department. We are asked to monitor accounts for suspicious activity and are required to "know the customer" in ever greater detail. Compensation for these activities is one critical use of the 12(b)-1 fee.

Change the name of the fee if you must, but keep it in place so that we can give customers the service they deserve and give our government the security assistance that it needs in today's environment.