The background to this study is the failure of mutual fund independent directors to fulfill their obligations as “shareholder watchdogs,” as defined in the 40Act. What is needed is for fund independent directors to “request” fund advisers to provide “normative transparency of...

The updated New Total Expense Ratio is designed to categorize properly each type of mutual fund fee and expense. The purpose is to provide normative transparency of disclosure to serve the primary interests of fund shareholders. The current regulatory scheme of disclosure is short on...

This study presents the construct of a New Total Expense Ratio built upon the concept of normative transparency of disclosure. This construct presents the reality of adviser/distributor payments to brokers “behind the mutual fund curtain.” The source of these payments is fund and shareholder...

Barber, Odean, and Zheng's [2005] analysis of mutual fund front-end loads, sales commissions, and operating expenses finds that over the past several decades ordinary investors have “learned” what they value in choice of funds. And, fund advisers learned early on to provide what attracts...

This paper includes theories of advertising and investor behavior and their application to mutual fund advertising and investor choice. Mutual fund advertising and its affect on investor choice is discussed in the context of the role of advertising, advertising as persuasion, investor choice,...

The basic question is why does mutual fund advertising work? The summation of external evidence is compatible with evidence that larger mutual fund advertising attracts investors with below average financial literacy who find the investment decision process overwhelming: (1) Investor levels of...

The 2003 mutual funds scandal that exploded upon the public revealed something that had long been known to insiders: Mutual fund advisers often approve and allow frequent trading, frequent trading arbitrage, and late trading arbitrage to selected traders. To increase adviser profits, fund...

This study uses the portion of a new Total Expense Ratio construct that discloses the reality of adviser/distributor payments of hidden distribution fees to sales brokers "behind the mutual fund curtain". Distribution fees consist of dealer (broker) concessions, accounts servicing (12b-1 fees),...

The first goal is to review types of transparency — relative versus absolute and positive versus normative, transparency of the SEC total expense ratio, stewardship and transparency, the aftermath of the fund scandal, the movement toward normative transparency, and future transparency. The...