Written by Pauline Beart on 01 Aug 2010
Those jittery about paying the effectiveness of the fee charged on investment in mutual funds should exhale a sigh of relief.
The so called 12b-1 fee charged under them is deemed to be vexing by many fund investors.
This fee can include the costs of compensation for brokers, advertising-related costs, in addition to service costs like mailing quarterly fund disclosures.
As a beginning, Securities and Exchange Commission seeks to eradicate its preposterous name that it bears. However, if the official approval is given following a 90-day public comment period, the rules will introduce a radical transformation in the way investors purchase funds.
The vital changes highlighted under the overhaul is that the sales fee that long term investors are obliged to shell out would be done away with. Following the approval, they can resort to pay more than if they had already paid for upfront sales charge or “load,’’ when they entered the fund.
In addition, the brokers would be able to charge fee as per his wish. Hence, the competition is likely to rise as a result.
Besides, fund disclosures will be made mandatory in a view to discern the difference between what investors pay to brokers in name of ongoing sales charges, and what they are charged for marketing and services.
source: frenchtribune.com
Written by Pauline Beart on 01 Aug 2010
Those jittery about paying the effectiveness of the fee charged on investment in mutual funds should exhale a sigh of relief.
The so called 12b-1 fee charged under them is deemed to be vexing by many fund investors.
This fee can include the costs of compensation for brokers, advertising-related costs, in addition to service costs like mailing quarterly fund disclosures.
As a beginning, Securities and Exchange Commission seeks to eradicate its preposterous name that it bears. However, if the official approval is given following a 90-day public comment period, the rules will introduce a radical transformation in the way investors purchase funds.
The vital changes highlighted under the overhaul is that the sales fee that long term investors are obliged to shell out would be done away with. Following the approval, they can resort to pay more than if they had already paid for upfront sales charge or “load,’’ when they entered the fund.
In addition, the brokers would be able to charge fee as per his wish. Hence, the competition is likely to rise as a result.
Besides, fund disclosures will be made mandatory in a view to discern the difference between what investors pay to brokers in name of ongoing sales charges, and what they are charged for marketing and services.
source: frenchtribune.com
