Subject: File No. S7-15-10
From: Brian E Mell, CFP

August 23, 2010

The concerns raised over 12b-1 fees seem to come from many different sources. A large segment opposed to these fees originate from fee based advisors whose self interest has to be questioned. The problem is when you're on the outside looking in it's easy to simplify a problem and recommend a solution whose unintended consequences would be devastating. The fee based advisors who critique these fees would serve my $500,000 and up clients well, but would they even consider serving my $10,000 client? I highly doubt it.

I have been a financial advisor for 12 years. I work in a large credit union with several other advisors in our various branches and have helped thousands of average americans save for their retirements. We do not have a minimum threshold as many 12b-1 critics do. We help everyone. Whether it's a young person starting an IRA with $1000 or a family putting away $100/mo. to save for their childrens college. We do not have a minimum yearly fee. 12b-1 fees supplement our income for the hundreds of client phone calls and walk in customers whom we help each month with ongoing account maintenance.

The solution and my recommendation would be to disclose the fee to the client and change the name to "service charges". Since all of my clients have been informed that is how we are compensated on an ongloing basis why not let them just see it and everyone should be happy. The system is not broken it has worked well for many years, the problem I understand is that some people don't realize they are paying these fees. Full disclosure would solve this issue.


Brian E Mell CFP(r)