Ameriprise generated greater revenue for itself but lower returns for its retirement account customers by recommending higher-fee share classes
, said Anthony S.
It will offer the fund with four share classes
: investor (with fees of 14 basis points), premium (6 basis points), institutional (4 basis points) and institutional premium (3 basis points) -- the last two of which are the firm's newest share classes
That's the conclusion of research performed in April by Morningstar on the new share classes
that have cropped up in order to comply with the rule -- including T, Z and P shares.
According to Morningstar, institutional share classes
represented 31% of assets at the end of 2Q 2016, up from 16% in 2006.
A credible claim could be brought, however, against in-house plan fiduciaries in connection with the share classes
made available in the self-directed accounts.
The fund will benefit from improved liquidity terms, with all share classes
now being made available to investors for subscriptions and redemptions on a daily basis.
But a Google search found share classes
represented by just about every letter of the alphabet not to mention share classes
particular to different distribution channels ranging from advisors to retail customers to institutional funds.
As he pointed out during the webcast, unlike other share classes
, clean share "payments are direct -- from investor to the provider of advice, rather than indirectly through the expense structure of the fund.
Accordingly, higher-expense share classes
for a fund have lower returns than lower-expense share classes
for that same fund.
The Securities and Exchange Commission launched on July 13 an exam sweep to identify conflicts of interest tied to advisors' compensation when recommending mutual fund and 529 plan share classes
with "substantial loads or distribution fees," including 12b-1 fees.
Plans have much larger asset pools, so they can buy less expensive shares such as institutional share classes
of the same mutual funds.
Dimensional Fund Advisors, a leading institutional investment manager, announced today that it plans to launch two R share classes
for use in defined contribution plans.
MFS is among a growing group of fund companies offering mutual fund share classes
-- usually called "Z shares" -- to fee-based advisors that exclude additional fees because those fees could be considered a potential conflict of interest for advisors under the Labor Department's fiduciary rule.
Q: How do I find out if the share classes
of mutual funds in my retirement plan are the cheapest offered, the most expensive or somewhere in-between?
All new business going into clean share classes
from April 2014