Jonathan,

I believe it is very appropriate to analyze the conflicts of interests that are pervasive in the fund industry. Trading costs are certainly part of the equation. The most excessive costs are the absurd indirect costs that shareholders pay to intermediaries like Schwab. Shareholders have no idea that the .40% that schwab is charging mutual funds to hold funds is being charged to them. Stop the revenue sharing charged by custodians and brokers and you start to get the industry back in shape.

Do shareholders pay a percentage of holdings for equities or bonds? Why should mutual funds pay a percentage of the holding to a custodian or broker.

Discontinue revenue sharing that is not a commission (12b-1) and the industry starts to understand. It's all about the money - it always is. Spitzer understands even if he is out for himself.

ps. The serious transaction costs are in wire house "wrap accounts". The trading desks are profit centers.

Keith Shadrick
Axia Advisory Corporation
One North Pennsylvania St., Suite 520
Indianapolis, IN 46204
ph 317.630.2800 x1
fax 317.630.2808
kshadrick@AxiaAdvisory.com