Following the SEC's unanimous vote to shed light on 12b-1 fees, the consumer press is now running with the story. An Associated Press story over the weekend provides something of a "crib sheet" on how the fees were first instituted in 1980, and how much investors are unwittingly paying for the services these fees cover.

The story begins by telling investors: "[You] may justtifiably worry that you're paying more than you should." It explains that trailing 12b-1 fees are not disclosed particularly well to investors, and that they can cover everthing from broker compensation to advertising to quarterly updates. It essentially implies that, depending on the share class an investor or their broker selects to purchase a mutual fund, an investor could end up unwittingly paying trailing fees "for decades."

The story then says that some trailing fees range as high as 3% to 5.75%. The 12b-1 fees are capped at 25 basis points, a key factor that is not included in the story.

The SEC, which instituted the fees 30 years ago, the article says - without fully explaining the reasons why the regulator was trying to assist the nascent industry and its retail investors - now would like to prompt brokers to compete on fees and to make fund companies and brokers do a better job of disclosing what they are charging investors, and why.

The AP story ends by telling investors the fund industry took in $9.5 billion in 12b-1 fees in 2009.

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