Gretchen Morgenson
speaker
80 appearances
2 recordings
1 series
first heard Feb 2019
last heard May 2019
Gretchen Morgenson’s voice in public audio — every appearance, attributed to the second.
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Appearances
It is under the securities laws called a 12B1 plan.
And so the reason this is important is because if a fee to get on a platform to sell shares to mutual fund investors is in fact a distribution-related fee, then it has to be disclosed to investors as part of a 12b-1.
Now, this infrastructure fee is described in Fidelity's documents as a shareholder fee.
services fee that may not have to be disclosed under a 12b-1 plan.
So the question really is, is what is this fee all about?
Are investors being told precisely what its role is and what it is aiming to do?
You would think that a platform fee might have something to do with distribution or selling of mutual fund shares.
And so the question is, is this fee being disclosed to investors in the appropriate manner?
Fees like this absolutely take away from the net any investor has at the end of the day in their retirement account or any account.
Fees are really important to watch.
That's why the Securities and Exchange Commission requires fees to be fully disclosed.
It's really important from the standpoint of what are you going to have at the end of the day in your retirement account.
And that's why this is crucial.
Now, in some cases, the SEC has brought enforcement actions against mutual fund companies that used money from fund assets to try to sell shares, to promote shares.
And that was improper because they were not under a 12B1 plan.
So it's a very arcane issue, unfortunately, that a lot of people don't really want to get into the weeds on, but it's important.
It basically was if you don't pay this, it's basically 0.15% of assets.
What we say in the industry is 15 basis points.
Mm-hmm.
If the mutual fund companies don't pay that fee – and these are third-party funds.
Showing 41–60 of 80 · page 3 of 4
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