Subject: File No. S7-15-10
From: Howard A Townsend, CFP, ChFC, CLU
Affiliation: FSI, FPA

September 15, 2010

It would be impossible to service clients under $100,000 (or even 250K) for a .25% service fee. You couldn't devote more than an hour per year for even the $100,000 account. There would be no successor purchasing accounts with that kind of "trail." Your financial planning firm would have no value to a buyer. Say goodbye to the smaller client.

"C" shares have enabled us to offer "pay as you go" fee-based accounts to clients of all size with performance reporting and annual meetings. No front or back-end charges gives us the flexibility to manage and re-balance across different investment companies. The early years of "C" shares were also important to larger clients. We didn't have the variety of separate accounts, UMAs and third party managers that we have now. This was the only way to avoid front-end loads and .25% 12b-1s (which disincentivises future service).

If "C" shares go away, all clients (those with large enough accounts) would have to be transferred to a fee-based model. What do you do with your small clients that have "C" shares or large clients with some smaller accounts in the household? The time, paperwork and fiduciary responsibility to do all this would be overwhelming.

In order to retain business value for your succession planning, only fee-based accounts would have any buyer interest. All other accounts would end up being orphaned. The smaller investor falls through the cracks again

Obviously, government doesn't understand our business or, more probably, any business