Subject: File No. S7-15-10
From: Anthony F Darga

October 19, 2010

I personally believe that the biggest problem in the financial services industry is front end loads and high first year compensation. Advisors should never get more than 1% up front for mutual funds or annuities, for that matter, but should get up to 1% annually to keep the investment on the books and encourage advisors to pick the best investments for the long term. This annual amount should be paid to the advisor that is actually serving the investor with annual reviews and the investor should be able to request that a different advisor service the account if the investor is getting bad service from the advisor of record.

I am lumping annuities in with mutual funds because the advisor that typically sells mutual funds also typically sells annuities because both are meant for long term investing for retirement income. Neither should pay more than the other because there should be no incentive for the advisor to choose one product over another. However, the compensation needs to be high enough to attract good financial advisors as well. 1% per year appears to be the current industry standard for advisor pay so there is no reason to compensate advisors more than that. This is based on the C share model as well as the typical 'wrap fee' that advisors charge to manage portfolios that have 'no load' funds and individual stocks.