Subject: File No. S7-15-10
From: Patrick Elmore
Affiliation: Financial Advisor, Raymond James Financial Services

September 7, 2010

I have read the many commentaries written by my fellow advisors regarding the 12b-1 fees. I agree with all of the valid points but would also like to add additional reasons illustrating the importance of C shares.

I currently manage accounts for over 700 households. Most of the accounts are less than 100k which limits the investment platform. I have only one managed (wrap) account to use, which is equivalent to the c share structure. It is more expensive for the client when compared against the c share structure. If the account size is less than 25k, which many of my accounts are, there are no managed (wrap) accounts offered. Therefore, the fee structure of the C share is attractive and beneficial for the client when compared against managed (wrap) accounts.

I have always been a huge fan of the managed (wrap) accounts because the advisor is compensated based upon the value of the account. If the account increases in value, the client has made money and the advisor gets paid more. If the account decreases in value, the client has lost money and the advisor gets paid less. There is no conflict of interest. If someone was buying and selling stocks and they were paying commissions on each trade, there would always be conflict of interest. If the advisor suggested selling a stock, in which the client has lost money, there is a problem. The advisor was paid commission on both ends of the trade and the client lost money. When using the C share structure this does not occur. Both the advisor and client benefit monetarily when the account increases in value and both lose monetarily when the account drops in value.

When reviewing your proposal of the cost of the "A" vs. "C" over a 17 year period, one must assume that the investor will hold the A share for 17 years. This is very unrealistic. The average holding period is only 3 years! It takes around 6 years for the cost to break even but the client rarely holds the fund for half that time. Many people ask, why such a short holding period. For starters, many clients get out of the market when it drops. This, of course, is usually against the advisors recommendations. Most funds offer money market options which allow the client to sit on the sidelines until they feel comfortable to get back in. For funds that offer money markets, this works fine. The client can move back and forth, in and out of the market, but what happens when there is no money market. The only option for the client is to sell and move to cash. When the client decides to buy the fund back, they will pay another 5% sales charge on the A share. For the C share, there is no upfront sales charge only a 1% CDSC for the first 12 months. This is the reason many of my clients prefer the C over the A share. Royce funds and First Eagle are just two of many fund families that do not offer a money market.

Mr. Patrick Elmore
Financial Advisor
Raymond James Financial Services