May 5, 2016
I was in the financial services industry for 30 years, serving clients in a fiduciary capacity.
While I always disclosed our fees, in dollars on client statements, when we started using mutual funds as investments we could no longer do that completely. This was disconcerting, professionally, to me. I did explain to clients that such funds were not "free" even though they did not see the costs on their statements. Most just trusted me that the costs were reasonable, and went on with their lives.
To me this was unacceptable. I firmly believe clients must know everything about what they are paying. Only with complete information given to payors, can service providers be fully "trusted" as payees.
I fully support expressing to owners of mutual funds and ETFs how much they paid, in dollars and cents, on each and every statement they receive. Only then can they become fully cognizant of the what their services actually cost.
I also support disclosing loads when they are paid, and a disclosure of deferred loads also. These important, often large, and virtually unaccounted for, fees must be fully disclosed also.
Finally, since many clients don't even open their statements, I believe there should be an annual mailing, separate from a statement, which discloses how much, again in dollars and cents, the client paid for the entire year preceeding. That information would be most valuable to clients.
And don't let the industry tell you that such information would be costly to produce. They already have that data, and use it to identify their best clients. Now they should share it with not only those "best" clients, but with all clients.