Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Businessweek Archives

Why The Big Boys Suddenly Like No Loads


Readers Report

WHY THE BIG BOYS SUDDENLY LIKE NO-LOADS

You have done a great disservice to mutual-fund investors ("The big boys finally say `yes' to no-loads," Finance, Nov. 6). Your reporter suggests that investors will be better off with these new no-load options: "Instead of a hefty load, investors will pay the broker a small annual fee...between 1% and 2% [annually]." This would be in addition to annual operating expenses, which are around 1.5% per year.

No wonder the "big boys" are diving in. This "small" fee would dwarf any load, even after a relatively short holding period, especially if investors would normally realize discounted commissions through large purchases. The industry just doesn't get it. The problem is not that investors are unwilling to pay a load. (On the contrary, most people are happy to pay for good financial advice.) It's that brokers have trouble justifying the cost associated with the quality of the advice and services they provide.

Theodore S. Kerr

Financial Adviser

Hefren Tillotson Inc.

Butler, Pa.


LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus