Fund Industry Still Seen as Badly Tarnished

"As the scandal keeps growing deeper, the need for further reform becomes clear," according to a column in the St. Louis Post-Dispatch. "It's as if the deeper regulators dig, the more rot they find," David Niklaus writes.

That was just brought home by Edward Jones and American Funds being found guilty of kickbacks. If two of the biggest poster boys for good fund behavior are even guilty of shady sales practices, Niklaus believes that probably every fund company is blameworthy, too. He predicts regulators won't let up until they've exposed every single case.

The most important change that he believes should come out of the scandal is more honest sales; just as a Buick car dealer lets consumers know they represent that manufacturer, fund companies and their selling brokers should tell customers if they have a cozy relationship.

But Niklaus doesn't hold out much hope for that happening: "Until you start seeing that kind of truth in advertising--and you probably won't--the great mutual fund cleanup will remain a work in progress."