Now, most investors aren't going to pore through a prospectus looking for how every dollar in a fund is spent. But more disclosure is always better, and the threat of this kind of thing becoming common knowledge would probably reduce some of the more exorbitant marketing fees being charged.
The rules also call for brokers to change the way they're compensated for selling mutual funds. Now, fund companies pay brokerage firms a percentage of their assets for selling their funds - which of course come out of the investors' assets. If the new rules are implemented, brokerage firms would start directly charging investors sales fees whenever funds are sold. As with the 12b-1 rule, the result would be more transparency in how investors are charged fees. That's always a good thing.
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