I had to laugh as I read John Waggoner`s InvestmentNews article, "Brace for thousands of new DOL fiduciary-friendly mutual fund share classes" because he described a new T-share class designed by mutual funds as "fiduciary-friendly.
" Waggoner explains the reason why mutual fund companies are creating a new T-share class:Dozens of fund families have filed to roll out the new share classes.
Typically, A shares charge a higher commission according to the product: Stock funds usually charge about 5.75%, while bond funds typically charge less.
The best funds for the client are most often funds which do not have a front end load nor do they have a trailing 12b-1 fee.
Creating a T-share class for which all mutual fund companies can collude to set a 2.5% front end load and a trailing 0.25% 12b-1 fee does not eliminate the conflict of interest.
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