Subject: File No. 4-538
From: Michael K Nakahira
Affiliation: Financial Consultant with First Allied Securities Inc.

June 6, 2007

Thank you for accepting comments on rule 12b-1. I am a Financial Consultant. I believe rule 12b-1 exists for a very good reason. Its' intent may have changed over time but remains to serve the best interests of the mutual fund share owner. Everyone deserves to be fairly compensated to provide service. Many Financial Consultants such as myself take into account the 12b-1 fee and explain at length this additional and in some cases only form of compensation to clients. Often times clients want to know what my interest will be in providing service in the coming years. When I started in the industry 21 years ago front-end mutual fund commissions were in comparison to today very high. I remember 8.5%. As front-end sales charges have declined the 12b-1 fee has become a form of compensation for providing ongoing service. The cost of being able to provide those services have risen dramatic.

I am also concerned about who is going to service the smaller investor so to speak. The only thing we all know for sure is that a lesser amount of compesation means less incentive to provide service to smaller investors. Often times the 12b-1 fee is the only form of fair compensation being received to service this area.

The 12b-1 fee allows many Financial Consultants such as myself the time to provide service to smaller investors since fair compenation is being received on the total assets of clients both large and small. I can afford to investment my time in a wide range of relationships. Yes- small and substantial.

If rule 12b-1 was eliminated and/or changed a large number of accounts may revert to mutual fund firms. No resources exist to service this amount of clients let alone know them. Substantial resources would have to be put into place to fulfill the Know your Client rule at the mutual fund firm level. This would only eventually come at cost to the consumer.

There must be a fair form of compensation in the mutual fund industry to compensate persons on the front line of this investment relationship to provide ongoing quality service. The mutual fund industry has grown well since inception and given its size serves the investing public well in my opinion. Thank you.