The mutual fund scandal has created some refreshing instances of transparency, and the latest one, The Wall Street Journal reports, involves the deals that brokerage firms make with mutual fund companies.
Thanks to greater disclosure, investors are now seeing how much extra money their fund firm makes if it sells a certain fund. For some firms, the increase in transparency has led to admissions that investors might get less access to non-favorable funds.
While Securities and Exchange Commission rules on such relationship agreements will probably be finalized by the end of the year, the companies pre-emptive moves are just another example of how eager they are to end a years worth of bad press amid the scandal.
"In view of the questions about ethics and governance within the industry, we thought it was in the best interest of our clients and the firm to be forthcoming about this," said Wachovia spokesperson Tony Matteria.
Some firms are disclosing the information the normal way, by posting it on their Web sites. However, some are going a step further and actually disclosing the nature of the relationships in quarterly statements.
Smith Barney goes even further than that, actually listing the firms it has agreements with in order of how much revenue sharing money they receive.
Annette Nazareth, who heads up market regulation for the SEC, said she would eventually like for the companies to have a uniform disclosure regimen to follow.