Financial services firms should be aware that the SEC has recently stressed the importance of mutual fund fees and expenses disclosures, as well the impact they can have on an investor’s portfolio. In a recent Investor Bulletin, the SEC highlighted the fees and expenses that mutual fund investors typically incur. The SEC advises that investors should pay close attention to a fund’s expenses and management fees which represent a percentage of the assets of the fund and are paid out of the fund’s assets. Indeed, the SEC encourages investors to compare the expense ratios of different funds. According to the Investment Company Institute, mutual fund holdings represent a significant component of the savings and investments of many US households, with mutual fund assets now accounting for more than one-fifth of households’ financial assets. Data from ICI indicates that almost 57 million people, or about 46 percent of US households, own mutual funds. The SEC’s bulletin likely signifies an effort to ensure that registered representatives adequately disclose and discuss mutual fund fees and expenses at the point of sale. Although investors should be held to the prospectus disclosures, registered representatives should be properly trained on how to interpret and inform investors of any mutual fund fee and expense structures that they recommend to investors. You may find the SEC bulletin here: http://www.sec.gov/oiea/investor-alerts-bulletins/ib_mutualfundfees.pdf
SEC Issues Investor Guidance on Mutual Fund Fees and Expenses
On Behalf of Lewitas Hyman PC | May 20, 2014 | Financial News, Securities and Compliance
Recent Posts
- CFP Board announces creation of separate nonprofit arm to advance profession
- SEC files charges against 2 NY representatives over unsuitable investments
- Advisor Group firms ordered to pay restitution to clients over 529 plan rollovers
- Wisconsin adviser charged with defrauding clients out of $1.9 million
- FINRA releases report to assist firms with compliance and risk monitoring
Archives
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- February 2021
- August 2020
- May 2020
- April 2020
- March 2020
- August 2017
- July 2017
- June 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- July 2016
- March 2016
- February 2016
- January 2016
- October 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014