From: Robert Karp [rhkarp@integraonline.com]
Sent: Thursday, May 06, 2004 12:05 PM
To: rule-comments@sec.gov
Subject: File S7 09-04

Investment News published my strong concern regarding the elimination of
12b-1 fees on page 12 of its April5, 2004 issue.  I will briefly summarize
my present concern.
Clients with less than a few hundred-thousand in mutual fund investments,
indeed, between $50,000 and $200,000 would encompass most of our clients,
need on-going financial planning services.  They do not need to pay
$150/hour for services and we have been able to service them with the 12b-1
fees that we net.  We understand that the original intent of the fee was not
necessarily for this purpose.  "Monitoring" was the word used in the
industry in the late 1980s when the fee was introduced.  We broadened the
meaning to include allocation, reviewal meetings, siting retirement goals
and savings plans to achieve them, dealing with tax issues,
multi-generational planning, etc.

Many members of the public are not even aware of their financial planning
needs.  The Government knows fully the ramifications of our low savings
rates and the effect it will have on the Social Security Trust, which is
already full of little other than IOUs.  Why would these people pay for
services they need but are unaware of?  They won't.  They will not be our
clients and they will not save for retirement.

Part and parcel to your plan to eliminate the 12b-1 fee should be a
quarterly servicing fee which a mutual fund investor can OPT to include when
he or she intially signs the application.  There could even be an annual
re-app for the service fee.  There could even be a range to choose from or
an SEC-imposed maximum.  The fee could be tailor-made for the level of
planning.  .25% is, for us, a minimum.  Our larger clients have moved to an
advisory platform and receive our additional services by paying additional
fees through our RIA.
To eliminate the fee would be a disservice to millions of investors.  The
bulk of our clientele are teachers and police workers investing in 403b
accounts via salary reductions.  These are the folks I speak of.  Actually
it is their successors who would NOT be our clients who are my concern.

My son, who has taken over my accounts this past year, will survive as a
CFP(TM).  But with no fee for small investors, his investors will be only
those who have enough wealth to recognize their need for financial planning
services.

Robert Karp, CFP
SunAmerica Securities, Inc.
Ph. (952) 890-0983