{"id":202,"date":"2007-07-26T06:24:55","date_gmt":"2007-07-26T06:24:55","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2007\/07\/industry_group_wants_to_reform"},"modified":"2021-09-20T15:41:16","modified_gmt":"2021-09-20T20:41:16","slug":"industry-group-wants-to-reform","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/industry-group-wants-to-reform\/","title":{"rendered":"Industry Group Wants to \u201cReform\u201d &#8211; Not End &#8211; Abuse Prone B-Shares"},"content":{"rendered":"<p>\t\t\t\tThe Independent Directors Council (IDC) recently provided the Securities and Exchange Commission with a list of &#8220;reforms&#8221; regarding 12b-1 mutual funds, including that mutual fund directors should oversee the fees.  The group claims that the fees are used to pay for advice and shareholder servicing, when the true use is to pay high comissions that can be hidden or obfuscated from investors. <\/p>\n<p>In 2006, the mutual fund industry collected $11.8 billion in 12b-1 fees.  The SEC sponsored a roundtable discussion on B-shares in June to discuss whether to do away with such shares.   Seeking compromise, The IDC now suggests &#8220;clarification&#8221; of 12b-1 plans, improved disclosures to investors and send-it-to-committee type delay tactics &#8211; all intended to avoid the proposed end to the issuance of such shares. <\/p>\n<p>Three decades ago Wall Street sought to compete with &#8220;no-load&#8221; mutual funds being sold directly by mutual fund companies. In 1980, it got help from Washington to create &#8220;B shares,&#8221; so-called because these are authorized under section 12-b of the Investment Advisors Act.  While no front end load is paid to buy such shares, sellers are paid up front to sell the shares.  Buyers are then charged fees each year for 5 years and, if they try to get our earlier, are charged a penalty for early withdrawal.  <\/p>\n<div class=\"read_more_link\"><a href=\"https:\/\/www.investorlawyers.com\/blog\/industry-group-wants-to-reform\/\"  title=\"Continue Reading Industry Group Wants to \u201cReform\u201d &#8211; Not End &#8211; Abuse Prone B-Shares\" class=\"more-link\">Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Independent Directors Council (IDC) recently provided the Securities and Exchange Commission with a list of &#8220;reforms&#8221; regarding 12b-1 mutual funds, including that mutual fund directors should oversee the fees. The group claims that the fees are used to pay for advice and shareholder servicing, when the true use is to pay high comissions that [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3799],"tags":[],"class_list":["post-202","post","type-post","status-publish","format-standard","hentry","category-mutual-funds"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Industry Group Wants to \u201cReform\u201d - Not End - Abuse Prone B-Shares &#8212; Investor Lawyers Blog &#8212; July 26, 2007<\/title>\n<meta name=\"description\" content=\"The Independent Directors Council (IDC) recently provided the Securities and Exchange Commission with a list of &quot;reforms&quot; regarding 12b-1 mutual funds, &#8212; July 26, 2007\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/industry-group-wants-to-reform\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Industry Group Wants to \u201cReform\u201d - Not End - Abuse Prone B-Shares &#8212; Investor Lawyers Blog &#8212; July 26, 2007\" \/>\n<meta name=\"twitter:description\" content=\"The Independent Directors Council (IDC) recently provided the Securities and Exchange Commission with a list of &quot;reforms&quot; regarding 12b-1 mutual funds, &#8212; July 26, 2007\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards &amp; Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Industry Group Wants to \u201cReform\u201d - Not End - Abuse Prone B-Shares &#8212; Investor Lawyers Blog &#8212; July 26, 2007","description":"The Independent Directors Council (IDC) recently provided the Securities and Exchange Commission with a list of \"reforms\" regarding 12b-1 mutual funds, &#8212; July 26, 2007","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.investorlawyers.com\/blog\/industry-group-wants-to-reform\/","twitter_card":"summary_large_image","twitter_title":"Industry Group Wants to \u201cReform\u201d - Not End - Abuse Prone B-Shares &#8212; 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