In general, investors in mid-sized fund companies pay lower shareholder-servicing expenses than those in large fund complexes, according to a new study by Lipper.

"[Larger fund groups’] shareholders demand a broad range of services such as 24-hour and wireless access that require constant technology and service innovations, Jeff Keil, VP of Lipper’s Board Analysis Services Group said in a statement. "A large financial commitment is required to deliver cutting-edge service."

Larger firms tend to want to keep shareholder services "under their wing" to maximize their effectiveness, Keil said.

"Mid-sized complexes on the other hand have ascertained that outsourcing the transfer-agent function to an experienced firm can provide solid service at a somewhat lower cost," he said.

The Lipper study considers expense data from 663 mutual fund firms and dissects it using criteria such as total fund complex assets, distribution methods and the number of shareholders.

The study found that in 2001 investors paid $11 billion for services, including 12b-1 fees and transfer agent services. The average investor, with $10,000 invested in a fund, paid about $28 for shareholder services, Lipper said.

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