Subject: File Number S7-15-10

October 21, 2010

Proposed rule changes to 12b1 do not provide consumers added protection, but rather limit flexibility. In my financial planning practice, I meet with many clients who have purchased investment products, but have changed their minds and want to "undo" their purchases. If the clients purchase front load shares, the money the sales load they have paid is gone forever. On the other hand, clients who purchase "C" shares can easily switch out of investments. The flexibility of this "pay as you go" philosophy is appealing to many clients. In short, it gives clients the ability to "fire" their advisor if he does not perform. When commissions are paid up front, the advisor has zero incentive to keep servicing that client.

From a business point of view, however, I cannot spread my revenues out over time unless there is a substantial premium for doing so. If given the choice between an up front 5% charge or the same charge spread over 5 years, I have to take the money up front. If C shares are restricted to paying no more over time than A shares - C shares will become obsolete and customers will lose the ability to purchase flexibility. This rule change favors product sales over good advice, favors "sell and run" business models over ongoing customer service.

James Kinney
Financial Pathways, LLC