The Bottom Line
Curious minds recently surveyed fund investors, asking what the annual cost, expressed in dollars, would be for a $100,000 investment in an average-priced active stock fund. The correct answer, as most of this column's readers know, is something around $1,000--the $100,000 asset base multiplied by a 1.00% annual fee. However, only 11% of respondents answered that the cost would be above $750. Just over half estimated that the fee would be less than $500.
The SEC's Investor Advisory Committee--the source of those curious minds--hopes to improve those numbers. Created by the Dodd-Frank Act in 2010, the Committee was designed to address the "regulatory capture" that occurs when government officials hear far more frequently from the industries that they regulate than they do from consumers. The Committee counters the customary Wall Street lobbying by making periodic recommendations to the SEC, on behalf of Main Street.