The orders issued today address advisers who directly or indirectly received 12b-1 fees
for investments selected for their clients without adequate disclosure, including disclosures that were inconsistent with the advisers' actual practices.
Plaintiffs suggested in the lawsuit that the revenue sharing represented "kickback payments" and that they were part of a "pay-to-play scheme" in which Empower received various types of mutual fund fees, including 12b-1 fees
, Other Expenses, and Total Expense Ratios
Jarcho also led numerous targeted high-risk examination initiatives in areas including cybersecurity, internet and robo-advisers, alternative mutual funds, share class recommendations, retirement accounts, high-yield bond funds, 12b-1 fees
and distribution costs, wrap fee accounts, and supervision of individuals with disciplinary history.
The "industry and regulators generally agree that clean shares will not have front-end loads or 12b-1 fees
, which are those used to pay for a mutual fund's distribution costs.
As a remedial action, beginning last October, Envoy stopped recommending investments in share classes that pay 12b-1 fees
and started transferring legacy and existing clients’ holdings to institutional share classes.
Revenues declined 9% sequentially, due primarily to lower asset-based Rule 12b-1 fees
. Additionally, our broker-dealer had lower sales commissions and lower advisory fee revenues.
It was with great disappointment, then, that we learned the DOL is not only not banning commissions, 12b-1 fees
, and revenue sharing with regard to rendering advice, but it is institutionalizing them.
Simply put, 401(k) plan sponsors using mutual funds that contain 12b-1 fees
and revenue sharing expose themselves to greater fiduciary liability.
R6 shares are offered at net asset value, with no front-end sales charges or 12b-1 fees
. Clients will be able to purchase R6 shares immediately and can also make a
In addition, 12b-1 fees
, which are ongoing charges for distribution and other services, tend to be relatively low for A shares.
Use a free service like Morningstar to view the fund expenses and avoid investments with loads, 12b-1 fees
or high administrative fees.