Subject: File No. 4-538
From: Hunter Wm Bailey
Affiliation: Regeistered Rep.

May 31, 2007

Regarding 12b1 fees. Although prior 12b1 fees were established to restart the mutual fund industry in the 1980 recession current use of these fees benefit the investor in assuring ongoing servicing.

The funds that I am aware of use this fee to compensate the representative for servicing the fund and/or in exchange for an upfront load.

I have clients that prefer the C share fund class because they can invest for the short term and avoid a large upfront charge they usually prefer to diversify among funds and managers. If they hold the fund long term the ongoing assistants from the rep is paid for out of the 12b1 fee that the rep receives. If the client is unhappy with the rep she can transfer to another rep/advisor. If she is unhappy with the fund family she can, after one yr. cash out of the fund family all together and avoids any load or early withdrawal charges.

Without the C shares 12b1 fee the rep might be inclined to offer high upfront loaded funds in which the client must wait several years before moving to another management mutual fund company in order to avoid undesired positions or commissions.

If the rep uses the top rated C share funds with low total expenses ratios and in a particular class or sector he can offer the client diversification among fund companies,managers,reduce redundancy of individual internal securities and the ability to move among funds after twelve months, allowing the portfolio to stay positioned in top performing funds.

This client could always invest into a fee bases account however most advisors require higher minimums than most mutual fund client maintain.

The low cost C share portfolio can actually offer the client lower total fees including the assistance of the rep/advisor. For if the portfolio uses C share funds with total fees including the 12b1 fee of 1.5% or less this total expense level would be much lower than the average fee bases account which might be over 2% when considering the internal fund mgt. fees, administrative statement fees, financial advisor and in many cases the third party money manager's fee.

The 12b1 fees paid to the rep/advisor are possibly the only compensation available to pay for ongoing assistance for client. Elimination of such compensation for the rep/advisor might cause many investors who are currently receiving ongoing assistance and guidance to be left without fund servicing, fund allocation assistance, financial planning guidance etc.

In years past the problem was that the salesperson offered only short term relationships to the client only until the sale was made. Many clients who buy mutual funds and Annuities through Retail Banking institutions and Credit Unions have experience this problem. They have suffered sales pressure at the time of sale only to be ignored after purchasing the high sales commission or large early withdrawal Annuity.

The A share is a great choice for the large amount of funds intended to be invested with one family. The ongoing 12b1 fee assured future account services by any rep/advisor. The client can change reps and still get assistance from a rep of a different company. He would receive this fee and in turn be less inclined to recommend the sale of the older a share fund. 12b1 fees paid to the rep/advice provide the following for the client:

A shares-ongoing assistance from any rep/advisor in future years.

B shares-for small amounts invested and intended to stay with one fund family offers an upfront compensation for the rep/advisors efforts and service thus allowing the small client professional fund and investment assistance.

C share-no upfront commission charged, 1% early withdrawal penalty within one year however most funds provide 10%/15% free withdrawals if needed. The rep/advisor has a high regard for the account and desires for the client to be happy with the service received or run the risk that the account and future 12b1 fees would be lost to a competitive rep/advisor.

If the 12b1 compensation to the rep/advisor is eliminated many investors may be encouraged buy salespeople to buy high commission products or even turned away all together.

With up front sales commission disclosures, fund expense analyzers and disclosures signed by the client she is able to assess fees and expenses upfront and determine which share class is best for her situation.

12b1 fees paid to the rep/advisor encourage a long term relationship between the rep/advisor and client with hopes of future client satisfaction and fund performance.

In my opinion.