Subject: File No. S7-15-10
From: Jeffrey D. Ball, CFP
Affiliation: Financial Consultant, RBC Wealth Management

August 13, 2010

The proposed clarification of mutual fund internal expenses seems fair. Yet it also seems to miss the mark. I believe that advisors using "level-load funds" (c shares) have very little opportunity to over-charge and it is one of the most cost- effective and flexible ways to access the financial markets. If the goal is reduce abusive sales practices and over-charging then regulators should look to other areas. Some advisors who use "A shares" recommend them based on their 10 year net cost, but often find a reasons to sell and buy different funds frequently. On the other hand, advisors who use "level-load" funds have no incentive to churn accounts this way. There may also be RIA's and planners charging fee's and commissions, while there clients are unaware of the commissions. The disclosure of fees on A share confirmations should be re-evaluated and improved. In addition to that, firms that are portraying themselves as discount firms are taking advantage of investors. Many of their customers are the least knowledgeable and most vulnerable of investors. Phone reps are making investment recommendations that are not in the client's best interest. By wrapping "re-balancing fees" around mutual funds these firms are offering services which are more expensive than their full-service counterparts. The efficacy of these programs is questionable at best. I wonder what it would look like if everyone was held to a fiduciary standard.