Time to Fix the Mutual Fund Marketplace

Posted on August 20th, 2015 at 1:49 PM
Time to Fix the Mutual Fund Marketplace

From the Desk of Jim Eccleston at Eccleston Law LLC: 

Recently, I read an interesting editorial. The author argued that, while there is an excessive amount of share classes offered by open-end mutual fund companies, there is no need. Within these share classes, there is no competitive advantage offered to the investors. In fact, the main purpose of those share classes is only to hide the fees paid by mutual funds to the brokers and to exchange of business between the companies and the brokers.

Investors usually are oblivious to what is truly going on. Mainly because they are kept in the dark. The details of sales commissions never are displayed on the investor’s statements and most are unaware of how their portfolios are being affected.

There are major differences among S&P 500 index funds in terms of charges. Charges can range from a low 0.02% to as high as 2.32%, all for the same kind of fund. 

The author argues that it is time to bring investors out of the dark. To fix the broken system, 12(b)-1 fees and back-end loads need to be eliminated. Additionally, all expenses should appear on investor statements.

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags: Eccleston Law LLC, James Eccleston, eccleston, Eccleston Law, mutual funds,

Return to Archive

TESTIMONIALS

Previous
Next

I just received this letter from the CFP Board. Thank you, Thank you, THANK YOU!

David Y

LATEST NEWS AND ARTICLES

August 12, 2022
SEC Charges J.P. Morgan, UBS, and TradeStation for Deficiencies Pertaining to the Prevention of Customer Identify Theft

The Securities and Exchange Commission (SEC) has charged J.P. Morgan Securities, UBS Financial Services, and TradeStation Securities over deficiencies in their programs designed to prevent client identify theft, which violates the SEC’s Identity Theft Red Flags Rule, or Regulation S-ID.

August 11, 2022
FINRA Suspends Former Schwab Advisor for Failing to Disclose Felony Charges

The Financial Industry Regulatory Authority (FINRA) has suspended a former Charles Schwab advisor who allegedly failed to disclose multiple felony charges.

August 10, 2022
UBS Wealth Group’s Legal Costs Skyrocket in Q2

UBS Wealth’s litigation expenses have substantially spiked in the second quarter as the firm has faced a host of investor complaints and regulatory probes into UBS’ volatile Yield Enhancement Strategy (YES).