Subject: File No. 4-538
From: Kelly Pratas
Affiliation: President, Kuykendall and Schneider, Inc.

June 1, 2007

We believe it is important to make a clear distinction between using the 12b-1 fee as a back-end load and using it as an account service fee. My small brokerage firm, with three producing brokers, is able to direct our clients toward Class A mutual fund shares, with low annual expenses (generally around .70% including the 12b-1). The 12b-1 account servicing fee of .25% allows us to service these accounts and continue to advise our clients. Without the .25% 12b-1 servicing fee, we would be forced to reexamine our firm's business model which would probably result in some sort of WRAP fee, thus increasing costs to our clients. We also suspect that there are many small firms which operate in this manner and whose clients may also be faced with rising costs.

Even with the .25% 12b-1 fee, the total expenses of these funds (American Funds Class A) are substantially below the industry average. Our clients are able to have their assets professionally managed for less than 1% per year and have a local investment professional who can afford to advise them on asset allocation, retirement planning, education planning, etc.

That said, we do believe reform of the 12b-1 is in order. Using the 12b-1 as a back-end load in funds without a front-end sales charge is very often not well understood by the investor nor, in our opinion, is it clearly explained by many investment professionals.