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
These are outside funds, not Fidelity funds, who want to get on the platform because there is $1.5 trillion worth of non-Fidelity assets on this platform.
So if you don't pay that 15 basis points, then you will have a very limited relationship with Fidelity, the company says.
So the message is pretty clear.
Make sure it's disclosed properly.
Make sure it's identified properly.
And if it is a fee that is designed to result in shares that are sold, i.e.
marketing, distribution, then you have to call it as such.
Yes.
In fact, this fee is only levied on low-cost fees, such as those in retirement accounts.
Those share classes do not typically have distribution-related fees associated with them.
They're cheaper.
People have been flocking to them.
And this has had an impact, a negative impact, on Fidelity's business.
It's traditionally an actively managed mutual fund company, and many, many, many investors have
really decided instead to go with index funds, passive investing strategies that have a far, far lower cost.
So the fact that Fidelity has to levy these fees on those low-cost funds is going to have an impact on investors.
Correct.
This is a fee that they're charging because the traditional business model is broken, quote unquote.
And this is a solution to that problem for Fidelity.
Anytime.
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