Noted national syndicated columnist Jane Bryant Quinn is warning investors to be wary of high-cost mutual funds, which may be out to dupe them. In a recent Newsweek column, Quinn says that in this market, even tiny percentage differences in cost can add up, making investors potentially lose thousands of dollars every year.

Regulators such as the Securities and Exchange Commission are creating new ways to alert investors about shady revenue-sharing arrangements between fund companies and brokers, in which fund companies pay brokers to tout their funds to investors.

The SEC ran focus groups where it provided information on revenue-sharing agreements, upfront sales charges and so forth. "The legalese went right over people's heads," Susan Wyderko, the SEC's head of investor education, told Quinn. Now, the Commission is developing a clearer, simpler disclosure form, which would help investors look out for deceptive sales practices. For instance, branding and consulting firm Siegel & Gale is developing a "plain English" disclosure form that would help investors understand what they're paying for when they buy a fund.

Quinn expects this move to be strongly opposed by brokers.

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