In theory, they should be reducing overall fund expense ratios by increasing the asset base of mutual funds. This would then lower the overall expense ratio for all shareholders. That was the original theory and rationale behind allowing 12b-1 fees to be charged in the first place about 30 years ago. But since then, fund wholesalers have been selling funds, receiving huge salaries, having all of their expenses paid by the fund companies, and in many cases receiving commissions based on revenue sharing deals with registered reps.
The problem today is how to justify these huge salaries when they do not directly benefit shareholders. Yet almost everyone agrees that the best way to increase overall fund returns is to invest in funds with low expenses.
Since that is the case, how can so many funds justify these large salaries without decreasing their expense ratios? So with that as a brief background, this salary chart which comes from U. Department of Labor statistics and Kassina show the salaries of various professions, many of which provide specific, tangible societal benefits. Since the late s, mutual fund asset growth has declined significantly from the record levels seen during the mid- to lates. Yet according to Kassina, a mutual fund consulting group, wholesaler compensation has not declined despite the downturn in the industry and the significant layoffs.
This puts mutual fund wholesalers at the top of the compensation list, based on government and fund industry statistics. What Benefits Do Wholesalers Provide Shareholders? If such a correlation exists, it would make a great marketing message and allow some fund marketing exec to differentiate their fund.
It also would be especially welcome now since the fund industry is so openly antagonistic and has vehemently lobbied against all issues related to fiduciary responsibility, transparency, fee reduction and any modicum of financial reform. But this again raises the simple question: Chuck Epstein has managed marketing communications and public relations departments for major global financial institutions and participated in the launch of industry-changing financial products.
He also is a marketing consultant, writer and speaker on topics related to investor protection and opportunities in the very dynamic cannabis industry. He has held senior-level marketing, PR and communications positions at the New York Futures Exchange, Chicago Mercantile Exchange, Lind-Waldock, Zacks Investment Research, Russell Investments and Principal Financial. He has won national awards from the Mutual Fund Education Alliance MFEA and his web site, www. Your email address will not be published.
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The financial sector which has the most contact with the investing public—the mutual fund industry—has largely evaded pressures to reform. Home Mutual funds Chuck Epstein Bio About Links Quotes Contact Us Log In Register. Educating investors to regain control of their own money. It Should Happen This Year 02 Jun Concerned About Jobs for the 21st Century? Revoke His Pension 18 May Whatever Happened to Longevity Annuities?
The mutual fund industry's biggest secret. This is a contentious and sticky issue for a few reasons: Are the salaries justified?
American Funds: Fact vs. Fiction for Investors.
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Chuck Epstein Chuck Epstein has managed marketing communications and public relations departments for major global financial institutions and participated in the launch of industry-changing financial products. You Might Also Like Are Retirement Planners Whistling Past the Graveyard? Principal CEO Says Investors Cannot Understand Benefits of ETFs and Alternative Investments November 18, No Comment Leave a reply Cancel reply Your email address will not be published.
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Wholesaler, Financial Services Salary
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