Hope You Like Paying 12b-1 Fees

If you’re paying 12b-1 fees and hoping for some relief in 2009, you’re out of luck. The US Securities and Exchange Commission has announced they have bigger fish to fry -- like Bernie Madoff (big fish and fry are two good terms to use in Bernie’s case -- agree?).

The SEC plans to commit more resources to investor protection issues and shelve 12b-1 fee reform for now. It’s not a surprise that the SEC will focus on issues that have put their good name in question. I agree that the SEC should allot the appropriate resources to protect investors, but it’s unfortunate that the issues are mutually exclusive.

Again, there are important issues the SEC must contend with, but 12b-1 fee reform has been discussed for years with no action. I recall dealing with brokers years ago that were concerned that their trail commissions (from 12b-1 fees) would be diminished if faced with more disclosure. Let’s hope the SEC deals with this important issue sooner rather than later.