July 19, 2007

I have been in the financial services industry for close to twenty years and service 500 households. I am also a branch manager of 10 other independent reps serving over 3500 middle class accounts. We provide constant service to those people utilizing the 12b-1 fees from their mutual funds.

In Montana we do NOT have a large population of wealthy clients utilizing fee based or hourly accounts. Most of the households average $50-100,000 in total assets and are spread across a large geographical area. I do have one rep that has utilized the fee based compensation model and he is now having to prove to the regulators, via documented e-mails, phone call records, and service records that the asset-based fees he charges are justified. The regulators have stated if the fees the charges could have been less in a commission based model, i.e. 12b-1 fees, he should move their accounts back to a commission structure. I have seen the work he does and his fees are very much in line with the industry. Most of my reps continue to express frustration toward the poor scrutinty of their compensation model. I have heard the statement, "It is almost a crime to get paid in this industry and they can't make up thier minds as to what is right".

If the 12b-1 fees are eliminated or reduced it will make it tough for myself and all my reps to continue to service these clients using $3/gallon gas. If we then move them to fee-based accounts I have no doubt the smaller clients will be charged more or lose the badly need service on their accounts.

In Montana we are more of a "show me" state where deals are cut over the kitchen table or a fenceline on the ranch. Our people don't trust or like to deal with #800 numbers and e-mails. Please do not remove the servicing capability of my reps by eliminating the 12b-1 fees. This will definately be a lose, lose for our middle class clients and reps.

For these reasons, I urge the SEC to reject any proposal to eliminate or restrict the payment of 12b-1 fees to registered representatives for providing continued service to their clients.

Thank you for your consideration of my views on this subject.