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How much money do 12b-1 fees take from shareholders? An article, American Funds Hit With 12b-1 Lawsuit (The Street.com, July 2, 2008, by Kevin Burke) reported that American Funds in 2007 paid out over $2 billion in 12b-1 fees in 2007. This data came to light as an investor in the $122 billion American Funds EuroPacific…
As the battle for financial reform continues into 2011, the battle lines are clearly drawn: It’s the professional financial services industry against its own customers. While there are pockets of resistance, such as the Americans for Financial Reform, and the Committee for the Fiduciary Standard, have opposed any attempts at fee reform, increased transparency…
The current (August 27, 2011) issue of Barron’s has published my op-ed,”Why the Fund Industry Needs Shareholder Advocates” in its “Other Voices” section, page 45. The op-ed cites the need for fund companies to more aggressivly demonstrate they are acting in their own customers’ best interests. While this may seem an obvious thing to do,…
The proposal for creating Shareholder Advocate positions at the nation’s mutual fund companies is designed to correct the inherent conflicts-of-interests that exist between the fund company’s sales organization and its own customers. These conflicts of interest invariably are created when the inherent pressures to sell mutual funds clashes with the specific investment needs of an…
The current gatherings of anti-Wall Street protestors seem like amorphous groups, but the protests center around a variety of issues related to financial insecurity. According to the protestors, every class strata, with the obvious exception, is financially stressed and their losses in home equity and market portfolios will take years to recover. Consider that the…
Want to increase your 401(k) ‘s returns by up to 28%? Here’s a simple way to do it: Don’t focus on fund selection or the asset mix; look at the most mundane, boring statistic in investing: fees. Fees are off the radar screen for most 401(k) plan participants and, sadly, even their 401(k) plan administrators.
As discussions on Capitol Hill continue about the need for broker-dealer to adopt a uniform fiduciary standard, a lawsuit may provide some answers to a Congressman’s question about the lack of hard data. The question about the need to supply hard numbers to prove the cost of violating suitability standards was raised by Rep. Scott…
It is pretty evident to anyone who uses Morningstar or Lipper that choosing a fund in any category is challenging, not so much by the unique features of each fund, but by their profound commoditization. In the U.S. large-cap fund category alone, Morningstar lists 200 in their database, but this is only partial. It…
By 2027, There Will Be Six Generations in the Marketplace While everyone has an opinion about the markets, few people dispute demographic trends, especially when they become available globally. A new report by the consulting firm of A.T. Kearney, the Global Maturing Consumer study, claims to be the first to interview 3,000 people older than…
While large segments of the financial services industry focus on wealth management, a larger and more ominous number of financial reps will soon be practicing financial planning in an era of wealth destruction. The odd thing is that both financial planners will work with the same fundamentals. A Credit Suisse report on July 28, 2011,…
Fees and Expenses are the biggest costs an investor can control. Please pay attention to them. When the average investor buys $10,000 of Class A shares in a load mutual fund, how much of that money actually goes into the market? If you thought it would be $10,000, you are not even close. By the…
. The Progressive Investor www.theprogressiveinvestor.org is published and written by Chuck Epstein (epstein.chuck@gmail.com), who has held senior-level marketing communications positions at the New York Futures Exchange, Chicago Mercantile Exchange, Russell Investments, Principal Financial, Zacks Investment Research, and Lind-Waldock. While at the futures exchanges, he developed marketing-communications materials to introduce the S&P 500 Index, CRB Index,…
