Subject: File No. S7-06-04
From: Mark Baca

April 7, 2004

I am concerned about the Mutual Fund Reform Act proceeding through Congress. Specifically the attempt to do away with the 12-b1 fees that are paid to brokers.

The 12-b1 fees are a necessary fee that pays the broker for ongoing service of his accounts. Without them many brokers would not be able to provide ongoing service including but not limited to monitoring of the investors accounts. There would be now incentive for the broker service the account.

In addition there is the possibility that you would see many funds moving from family to family because the broker would not have the incentive to keep it in the same family.

An example would be where a client came in and said to review this account. By changing representatives the broker would be paid to keep the account in the same fund family because of the 12-b1 fee that would be paid to the broker.

If this was not available, the broker would be tempted to move the account to a different family in order to be paid.

Certainly this is normally not in the best interest of the client. The 12-b1 fees are ways for the broker to continue to service the account.

Without them the investors interests would be seriously harmed.

Your input to Congress in getting this bill changed is in the best interests of all.