Industry Adamantly Opposed to Limits on 12b-1 Fees

The mutual fund industry has weighed in through its comment letters on the Securities and Exchange Commission’s plan to rename 12b-1 fees as “marketing and service fees” and capping them at 25 basis points.

And the consensus in the more than 1,000 comment letters that the SEC has received is the industry would like the SEC to leave them alone.

“There’s an economic equilibrium that’s been in the marketplace, and government isn’t going to be able to change that by fiat,” Paul Schott Stevens, president and CEO of the Investment Company Institute, told The Wall Street Journal.

“Is government supposed to put price controls on mutual funds?” added BlackRock Vice Chairman Barbara Novick. “I don’t think so. We see a fair number of investors who vote with their feet.”

Novick said that while larger firms such as her own could absorb the higher costs, smaller asset managers would go out of business, leading to less choice for investors.