Subject: File No. S7-15-10
From: Beau Wolinsky
Affiliation: RIA, Level II CFA Candidate, CTA NFA/Registered Finra Firm Bachelor of Science Financial Economics Centre College, Danville, KY K.C. Capital Management, Inc. and the Kansas City Stock Exchange

July 22, 2010

The mutual fund distribution fees seemed confined to private pools of capital sold per share to investors. Aggregating by volume order-flow is an issue with connectivity and premium for financial infrastructure. Whether you charge that up front, it should come when earned, rather than up front. Accumulating AUM is the financial institution imperative, since it is theoretically infinitely scalable. It should really be covering fees for infrastructure left to the institution selling the product. Allocating shares price-wise does not work, either, because the shares still have to be computed at the sub-accounting level to a requisite percentage to calculate an asset based fee. Quarterly fees are certainly much more fair, but working for commission is not a transactional imperative profit motive for the non-broker, RIA Federally Registered SEC Firms. Funds are free to trade at Fidelity Investments through deals with Blackrock Investments and its holding companies. The real limitation to these financial transactions is the tip each investor gives when paying front-end loads. Reasonable costs calculated at the investors book value per share was an interesting solution to new revenue sources for the Federal government. It would seem fee-based advisors can charge such fees on the investor's book of business just as easily. Vertical integration of the average man's financial access means the transaction is at arm's reach. Up-front costs can be justified, but the industry leans towards free-consultations, and whether to pay for advice after. Some commission is acceptable if it is limited to small tick increments, preferably 0, 0.25% per share asset based fees is a laughable amount to charge for financial transactions..--

Beau Wolinsky