The 'Many Faces' of Mutual Fund Revenue Sharing

55 Pages Posted: 28 Aug 2012 Last revised: 1 Nov 2014

John A. Haslem

University of Maryland - Robert H. Smith School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: October 31, 2014

Abstract

The objective of this study is to take some of the mystery out of mutual fund revenue sharing, but without being able to say investors have transparent disclosure. Topics begin with the transition from directed brokerage to revenue sharing. The discussions that follow include directed brokerage and revenue sharing; replacing 12b-1 fees; defensive 12b-1 fees; distribution with a difference; revenue sharing nuances; types of revenue sharing; revenue sharing summary; disclosure issues; revenue sharing and 401(k) plans; pension plan sub-transfer agency fees; Schwab revenue sharing; SEC versus Edward D. Jones; and Morgan Stanley distribution fees.

It appears that most in the world of regulation and practice of revenue sharing lacks clarity, consistency, proper redress and investor transparency, such as the so-called "direct distribution" of revenue sharing payments from fund adviser "profits."

Keywords: mutual funds, directed brokerage, revenue sharing, 12b-1 fees, direct distribution, indirect distribution, defensive 12b-1 plans, courts and excessive fees, regulation

JEL Classification: G2, G23, G28

Suggested Citation

Haslem, John A., The 'Many Faces' of Mutual Fund Revenue Sharing (October 31, 2014). Available at SSRN: https://ssrn.com/abstract=2136614 or http://dx.doi.org/10.2139/ssrn.2136614

John A. Haslem (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742
United States
202-387 2025 (Phone)

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