It is said that the only constant is change. The past year has illustrated this point in the financial services industry, having brought conditions and concerns to light that are dramatically changing how fund firms do business. Eliot Spitzer's exposure of illegal and questionable business practices and the SEC's and NASD's investigations into breakpoint issues have resulted in rapid changes throughout the mutual fund industry.

Direct impact of these investigations has been felt by those firms implicated in the scandals as they are forced to pay fines or cut fees as part of their case settlements. Even those firms not charged with any wrongdoing have felt increased scrutiny from shareholders and pressure to lower fees. They expect to see higher costs as liability and insurance rates rise. And they may for some time do business in an environment of investor attrition and lost shareholder confidence.

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