From: kevin moree [kmoree@bellsouth.net]
Sent: Thursday, May 06, 2004 10:01 AM
To: kevin moree; rule-comments@sec.gov
Subject: S7-09-04, SEC 12b-1 Mutual Fund Fee Comments

Jonathan Katz, Secretary
U.S. SEC

Removing the 12b-1 fee from mutual funds  will not save fund investors money 
but it will cost them valuable services. 

The fee itself is not the issue or the problem. Disclosure of the fee is the 
issue. 

Fund investors, in return for this fee, receive very valuable ongoing services 
and continuing investment review and analysis. Investing in a fund is not the 
end of the process but the beginning. If the investment advisor is not paid 
to providing ongoing advice the investor is not being served. Over time fund 
changes will need to be made. There should not need to be a commission for 
this continuing advice and future fund changes. But if the there is no fee for 
this service then brokers and financial planners will be forced to look for 
replacement of the fee income in the form of commissions. That is  a 
disservice to the fund investors. At the very least clients will be charged a 
separate service fee or advisory fee for ongoing account administrative 
servicing (beneficiary changes, name and address changes, etc.) and investment 
advice.

In many instances the small investor will just be forgotten and will be 
effected the most. This is because planners & brokers are no longer 
compensated and it will not be worth the process of collecting the tiny fee 
from this small investor. The 12b-1 fee, however, does become a meaningful 
source of income for Planners/Brokers over a group of small investors and is 
collected by the fund company for them. Since the fee grows as account values 
grow it is an added incentive to better manage the investors funds so the fund 
will grow in value. 

Let the fee remain but with proper disclosure. Let the client (not the 
Government) decide whether the broker/advisor is earning his fee with good 
ongoing service and advice. 

In Faith That the Right Decision Will be Made,


Kevin J. Moree, CFP
Securities and Advisory Services offered through Mutual Service Corp., Member 
NASD/SIPC