A new survey conducted by the
As of 2004, 12b-1 fees totaled $10 billion. "Over the past 25 years, as fund assets have grown 60-fold, total 12b-1 fees have registered strong growth," said Brian Reid, ICI chief economist. Compared to this, the typical front-end sales load has dropped from 8% in 1980 to 5% in 2004, Reid noted.
Among its key findings, the ICI study found that 92% of 12b-1 fees that mutual funds charge investors go towards compensating financial advisers and other intermediaries for assisting investors before and after purchasing funds. Only a small fraction of the fees are allocated to advertising and promotion, according to the study.
"For the vast majority of investors to reach their long-term investment goals, the advice and ongoing services of professional financial advisers is of great value," said ICI President Paul Schott Stevens."