SEC Preparing to Shine a Brighter Light on Fund Fees

Imagine a store where you pay by handing your wallet to a salesperson who then liberates 1.31% of your cash. That's how 88 million Americans pay their mutual funds, and the funds won't even tell you exactly how much you paid.

The Securities and Exchange Commission thinks you should know. It will soon release a study on mutual fund fees that will recommend that funds give shareholders information "to quickly and effectively estimate the actual amount they have paid fund managers during a given period," says SEC Chairman Arthur Levitt.

The SEC's proposal is in response to a recommendation by the government's General Accounting Office, which released a mutual fund fee study earlier this year. The GAO wants funds to put detailed fee information in shareholders' quarterly statements. The fund industry, always technologically challenged when asked to provide more disclosure, has argued that this would be too costly and burdensome. ...