May 6, 2016
In re: Recommendation of the Investor Advisory Committee
Regarding Mutual Fund Cost Disclosure.
With the assets I have under professional management, the advisor sends me a quarterly bill including the asset base used, the percentage (which I know, of course), and the amount due. I confirm this and then send a check. This is how it should be.
However, I do not receive information about the dollar costs of the mutual funds and ETFs I own whether under management or not. The challenges are two: (1) calculating the basis to which a percentage applies since the dollar value of the holding constantly changes throughout the billing period, and (2) assembling all the information (asset value and percentages) for all of the funds involved.
I would rather you solve this by motivating asset managers to voluntarily and competitively start providing this information. Perhaps you could work with Vanguard to initiate this. Fidelity would quickly follow, as would others. Frankly, when the SEC gets prescriptive, you make a mess of it. I find no required disclosures like prospectuses useful and instead rely on intermediaries like Morningstar.