Subject: File No. S7-15-10
From: Alan Hearn, CFP

August 17, 2010

I think the distribution fee, added to the expenses of managing a fund are too much of a weight for investors to realize much gain from their investments. Perhaps the distribution fee can be linked to the overall expense ratio? For example, cap the overall expense ratio at 150 basis points. If a fund wants to charge 100 basis points as a distribution fee, then they can only charge the investor 50 basis points for other expenses.

Another option is to have the distribution fee linked to the longevity of the fund. Perhaps a newly established fund can charge the maximum of 50 basis points, 100 basis points is way too much, and each subsequent year have the fee get reduced by 20% until it reaches a minimum amount of 10 basis points.

In addition to linking the distribution fee to a fund's longevity, also link the fee to the size of the fund. A billion dollar fund does not need the same percentage in distribution fees as a ten million dollar fund.

In closing, you need to lower the fees. Investors are being poorly served with high priced funds.