Mutualfundreform.com

Corporations vs. Their Own Employees “Wall Street sort of lost its way, in that investment banking has become a function not of allocating capital properly, but levering capital and levering the returns on capital as opposed to transferring capital to productive industries.”                                                                             –Bill Gross, CEO, PIMCO, as reported by Reuters, Bill Gross’ astute comments were aimed at a number of issues involving the separation of investment banking into two…

From the perspective of individual investors, revenue sharing is the Trojan Horse of the mutual fund industry. That means most investors have no idea that when they buy an actively-managed load fund, with its implied promise of above-average returns, they are also buying a package driven by 12b-1 fees and revenue sharing deals that they commonly do not know exist. But here’s a twist on this common story: What if…

Note: This article was originally published in July 2010.  Investors are still waiting for a decision. After decades of wrangling, false starts, and back room intrigues, it looks like the SEC is finally addressing the long-over due, critical issue of mutual fund fees. Today, these fees charged to fund shareholders amount to $12 billion, according to the SEC. Yet, despite this huge amount, shareholders have no idea what they are…

The struggle for financial reform became more interesting this week as an association representing financial planners accused an insurance industry lobbying organization of trying to kill the adoption of a fiduciary standard for individual investors. In a petition signed by thousands of financial planners, the Financial Planning Coalition said the insurance industry wants to kill the proposal to adopt a single fiduciary standard for financial professionals who deal with the…

While the 401(k) movement has been going strong for the past 30-plus years, it now looks like the investment managers who were administering the funds and providing the advice have been engaged in a conflict of interest with their company plan counterparts. At least that is what the U.S. Department of Labor’s Government Accountability Office now contends. In a recent study, “Improved Regulation Could Better Protect Participants from Conflicts of…

  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 and adopting a fiduciary standard.  Any of these reforms would address the issues related to…

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 individual shareholder, including the need for the lowest possible total expense ratio, full disclosure of…