Closed Funds Should Consider Cutting 12b-1 Fees

When 12b-1 fees were established in 1980 as a way to help mutual funds gain investors, the industry was far smaller than it is today.

Funds can charge 12b-1 fees of 0.25% and still call themselves no-load funds, and they are allowed to charge up to 1% a year. But when a fund closes to new investors, it seems logical that it wouldn’t need to continue charging for distribution fees.