Ex-SEC Official an Effective New Voice For Fund Owners

A few years ago, I was on the education committee of the powerful Securities Industry Association. It created and promoted several significant educational programs to member firms such as Merrill Lynch and Prudential Securities. The only thing that frustrated me was the inability of the committee to take any program directly to the consumer. While the consumer was the ultimate beneficiary, all programs had to be filtered through member firms.

Since then, I have tried to identify people and groups that create an advocacy for the consumer on mutual-fund issues. Of course, the most obvious advocate is the great John Bogle, founder of the Vanguard Group. Another is Don Phillips, the brilliant, peripatetic CEO of Morningstar. Not a day goes by without a reference to him and his company. Then there is the Alpha Group, founded by Harold Evensky and several of his associates. Their message should especially be effective because they actually manage portfolios of mutual funds for clients.

Mutual-fund companies consist of some of the richest and most powerful institutions on earth. It seems like only the flow of money in or out of their coffers has outside voting power on issues that affect the consumer. Consumer pressure groups seem to have only limited impact, but they are important because they keep the issues in circulation, especially with the media. The most obvious issues relate to lower costs, frequent and full disclosure of mutual-fund portfolios, and effective and objective boards of directors. ...