What do Fiduciaries, ETFs and 12b-1 Fees Have in Common?
| Jun 5th, 2007 | Filed under: Hedge Fund Regulation, Investment Management Fees | By: Alpha Male |
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A few days ago, we wrote a posting on the repeal of the so called Merrill Rule that allowed brokers to offer fee-based accounts without the full fiduciary responsibilities of traditional fee-based financial advisers. We argued that repealing this rule was good for those who want their adviser to present them with pure alpha or pure beta products without regard to the compensation they would receive from each. In short, we argued it was good for alpha-centric investing.
Three separate stories published today by Investment News illustrate the complex inter-relationship between the regulatory landscape and alpha-centric portfolio construction. Seemingly disparate stories about fiduciaries, ETFs, and 12b-1 fees have roots in the same underlying phenomena.
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