Attacks Continue on 12b-1 Fees

August 2004
Journal of Financial Planning;Aug2004, Vol. 17 Issue 8, p19
Academic Journal
According to a U.S. Securities and Exchange Commission (SEC) study, mutual funds charging 12b-1 fees mislead investors about the true cost of owning funds. The funds charging the fees attract more investment money than funds that do not. The study claims that 12b-1 funds have lower returns and greater volatility in sales and redemptions. According to an article in the Wall Street Journal, 67 percent of all funds charge 12b-1 fees. To give shareholders an overview of the cost of 12b-1 fees, the SEC is considering having 12b-1 fees taken directly out of shareholder accounts instead of the current practice of taking them from fund assets.


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