Subject: File No. 4-538
From: Michael E. McCune,JD,CLU
Affiliation: Financial Consultant

June 18, 2007

I am a registered representative and I have some rather strong opinions about the discussion on 12b-1 fees. Much of the discussion revolves around the issue of whether or not the fees are being used as the original legislation anticipated. The argument is made to eliminate these fees because they are not used as the original legislation intended which totally misses the point as to what these fees are being used for today. These fees are currently being used to compensate brokers for service for which they would otherwise get no compensation. If you ask any broker who has a sizeable amount of 12b-1 compensation how much of his/her (or his/her staff's) day is spent servicing accounts for which there is no other compensation other than 12b-1 fees and, in most cases, it will be a substantial amount of time. Elimination of 12b-1 fees is a draconian approach - simply changing the name of the fees to "service fees" would be all that would be necessary to overcome these ongoing questions about legislative intent.
Moreover, the effect of elimination of these fees would have the effect of destroying any service for accounts which are not appropriate for a fee-based scenario. Certainly, all of the distinguished members of the panel are intelligent enough that they would not work for zero compensation (unless independently wealthy and able to do nothing except pro bono work) and most financial advisors and firms would do likewise and be forced to stop providing service to the very people who likely need it the most.