Subject: File No. S7-15-10
From: Greg Keil

August 21, 2010

Get rid of Class A shares.

As you consider 12b-1 fees - please consider the following. Class A shares are NOT a good alternative for investors. As we all try to remove conflicts of interest between the investment advisor and the investor, recognize the Class A share creates a conflict of interest. It's basically an "entrance fee" into a Mutual Fund family. The fund family then offers "free exchanges" within the fund family - but what if they don't offer the "best in class" alternative? As a long time financial advisor, I've seen first hand how investors refuse to sell Class A shares - or change fund families - often to their own demise. I've watched investors lose a lot of money because they refused to sell their Class A shares "because I already paid the front-end load..." How do you think American Funds got so big? I'm sure many advisors have seen this with their clients. Fund families essentially "lock in" dollars to their fund family - and continue charging asset based fees. The fund families don't care which mutual fund clients own - as long as it's within their fund family - they get paid either way. This is anti-competitive...

The Class C share - or a version of it with breakpoints on the current "12b-1" fee is the best alternative - and most mirrors "advisory" models used at Broker Dealers today. It provides the most flexible, "no-load" type environment for the investor - and pays the advisor and on-going fee for service / advice. Mutual Funds are discretionary investments - so an "always on" asset based fee is fair - and accepted by investors. The pricing model of the Class C share is the best option for advisors and investors. There are no "golden handcuffs" - i.e. incentives for investors to keep their money with any one fund family - so it allows advisors to best offer "best in class" investment options to their clients - regardless of fund family.

This is so clear. The Class A share and the Class B share should be retired - and the Class C share with breakpoints that can be set by the Broker/Dealers should be the pricing option across the board. This levels the playing field - and creates the best environment for effective investment advice - and sound investment decisions.

The broker / dealers won't push this because it's in direct conflict with driving dollars toward their "advisory fee" products... Don't let their silence fool you.

The Mutual Fund companies want Class A shares to remain for the reasons discussed above.

Do what's best for the investors - and provide their advisors the best environment to do what you mandate - to do what's best for the client. Remove the conflict of interest inherent with Class A B shares - and create a Class C share version that allows breakpoints on the current 12b1 fees... AND make B/D's disclose the fees. Just like B/D's are already doing with advisory fee schedules. It's simple.