Alliance Capital Management of New York has disclosed that its recently requested advisory fee increase for the $4.7 billion Alliance Growth & Income Fund was vetoed by the fund's board of directors. The board recommended that fund shareholders approve a more modest fee increase.

The disclosure was made in a proxy statement filed with the SEC Sept. 8.

Alliance executives sought to raise the fund's annual advisory fee's top rate to 0.65 percent from 0.625 percent to bring the fee more in line with the investment management fees being charged by some of its closest competitors, according to the proxy statement.

The fund's existing management fee, which already included several breakpoints at various asset levels, had not been changed since well before Alliance assumed management of the fund in 1986 from Calvin Bullock Ltd., the proxy said. The existing breakpoints that lowered the management fee as the fund's asset base increased were outdated considering the fund's asset growth in recent years, the proxy said.

While management asked the board to approve increasing the management fee to 0.65 percent on the first $2.5 billion in assets, then reducing the fee to 0.625 percent on the next $2.5 million, the board would only agree to a lower advisory fee starting at 0.625 percent on the first $5 billion, the proxy said. Additional breakpoint changes as proposed by management were approved by the board.

Shareholders will vote on the advisory fee increase at a shareholder meeting Nov. 2.

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