Consumer advocacy groups and the national media have accused the Investment Company Institute of failing shareholders by focusing too heavily on the investment advisors on whom they depend for fees. Recently, in light of the continuing mutual fund trading and sales abuse scandal, they've again levied this unfair charge.

Fees are an obvious, primary concern for all of the companies in our industry, the trade association that represents it notwithstanding, but the ICI's mission statement actually is "Putting America's Shareholders First."

While critics may not be able to recognize this fact, there has, indeed, been a changing of the guard at the ICI.

ICI President Paul Schott Stevens gave the first hint of this more honest, vocal stance nearly a year and a half ago at a press conference in New York when he chose the word "hubris" to describe mutual fund companies' lax attitude toward investors and their fiduciary duty prior to Sept. 3, 2003.

But even before that, right after Eliot Spitzer unleashed this massive probe, ICI former president Matt Fink testified before Congress that he was absolutely "shocked," dismayed and believed those in violation of criminal laws "should be sent to prison." Speaking on Nov. 18, 2003 before the United States Senate Committee on Banking, Housing and Urban Affairs, Fink said: "I am appalled by the circumstances that caused you to convene this hearing. Like you, and the constituents you serve, I am outraged by the shocking betrayal of trust exhibited by some in the mutual fund industry."

What the ICI's past and current presidents were saying is that the mission of the ICI and the laws and regulations governing funds have remained unchanged. They simply need to be duly remembered and properly enforced. This positioning aside, it should also be noted, as the U.S. Chamber of Commerce and the SEC Federal court case begins to take place, that the ICI fully supported the Independent Directors Rule.

What is different about the Institute today is a subtle changing of the guard.

Besides a new president - replacing Fink, who served at the ICI for 33 years - the Washington trade group has a new public relations strategist, a new chief economist and a reinvigorated sense of purpose.

In preparation for this week's General Membership Meeting, the ICI has been busy drilling down through industry averages to weed out market-timing and portfolio turnover stats (see chart, above), while the PR team continues to seek out new ways to restore investor trust. One of the centerpieces of this week's meeting, for instance, is a series of videotaped interviews with investors called "Shareholders First."

Perhaps, in now shedding brighter light on investment management highs and lows, the ICI will not only better fulfill its mission of serving shareholders first, but now assist the industry and its public perception in a more effective way - and navigate us, once and for all, out of the scandal as a more resilient industry than before.

Spitzer noted in a recent Wall Street Journal opinion piece that targeted companies have reemerged stronger, most posting record profits. The "fund industry has overcome scandal and has huge inflows of cash," he said.

The way Spitzer sees Wall Street reform going, "the debate today is between an ossified status quo that erodes public confidence and bold action to restore accountability, integrity and true competition to the markets [by applying] strong enforcement of existing laws."

Let's support stepping up to the court of public opinion as well as the regulatory plate.

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