Columnist: Revenue Sharing Goes Underground

In this new age of heightened disclosure, fund companies and broker/dealers are being more up front about revenue sharing agreements, but the admissions are being "provided in language that is often vague or so dense that many fund buyers never digest it," according to an editorial in this week's issue of BusinessWeek magazine.

The magazine's editors further claim that "existing disclosure requirements are meager at best," and they argue that new rules proposed by former Securities and Exchange Commission Chairman William H. Donaldson should go forward. The rules would require that a brokerage disclose to a client how much it expects to collect in revenue sharing from that sale before the client buys a fund.