July 19, 2007
"The amount of this compensation is relatively modest; on a $10,000 investment, the annual 12b-1 fee equals 25 basis points, or $25. NAIFA members who market mutual funds earn their 12b-1 fees by providing much-needed service and advice to their clients." Amazing, that people in the busines of handling money can print this stuff and expect everyone to believe it.
Based on the most recent information, the amount of money invested in mutual funds equaled 11.4 trillion dollars. Multiplied by your 25 basis points, the amount collected in fees would equal $285,000,000. Does that sound modest to you? I don't have any problem with a business or company making a fee or profit on their services, I just take issue with everyone paying into the pot whether they need the services, or not. Someone with a $1 million portfolio, that does not require the services of a "advisor", would pay $2500 for nothing. Little hard to jump on your bandwagon.