Once again, Jack Bogle, the disenfranchised founder of The Vanguard Group, is using his bully pulpit to slam the industry practice of collecting excessive 12b-1 marketing fees, TheStreet.com reports.

As a participant in a panel sponsored on Monday by the North American Securities Administrators Association, Bogle publicly accused mutual fund companies of failing to deliver value in exchange for investors’ 12b-1 fees, which are taken out of annual expenses paid by shareholders.

In theory, 12b-1 fees should be inversely proportionate to a fund’s size. Larger funds theoretically require fewer marketing expenses. But the actual practice has been just the opposite. Morningstar reports that the average 12b-1 fee, which has grown to an average of 0.42% of a fund’s total assets, now generate $10 billion annually for the industry.

Bogle threw the gauntlet at the panel by suggesting fund management groups have grown fat on 12b-1 inflows that have dampened investors’ returns. Bogle advocates abolishing the fees, which, he says, are sometimes buried in prospectuses accompanying no-load mutual funds.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.