November 7, 2010
I urge you to heed Morningstar's proposal and to take this opportunity to address the deliberate hiding of fees and fee structures by mutual funds and brokers selling them. Unless you know exactly what to ask, you have no idea how much you are paying. Even then you may not get an accurate answer. If you comb through the prospectus the actual prospective costs are understated, for example in a fund with huge turnover. And who gets what portion of the fee is never clarified.
I cannot tell you how many people I have talked to who own Class A shares and have no idea that they paid about 5% of their money for the privilege of investing in a fund the broker recommended, and then are paying annual fees including a 12-b-1 fee to the broker/advisor.
The lending industry is required to provide a clear, standard outline of their fees. Why not the investment industry?
The government should not be dictating how much can be charged, the free market system can take care of it, if it has clear and accurate information. Thank you for your consideration.