Investor Question

[Snaggletooth]

A lively discussion no less. An appreciative thank you to all who have participated. FEDDUKE good to hear from you.

[kathyc2]

There are plenty of no load mutual funds out there. If management fees cause you stress, you should look into those. For load funds, it is not uncommon to see fees change / discontinue over time. I assume the reason is to prevent frequent quick buys / sells?

Mutual funds with front end loads as the way to compensate advisors are quickly going by the wayside. When I started investing in early/mid 90's it was the norm. Of course internet had not become common yet. With internet places like Fidelity and Scwabb came out for the DIYers. Investment advisors figured out they could make more by selling class F (no load) funds and then charging 1-2% every year on the total value of funds. For clients new to investing it's almost exclusive that they pay annual advisory fee. It's one thing if someone starts out and puts a few thousand a year in investing. Quite another when someone has a large chunk at once from such things as inheritance, life insurance or converting 401K to IRA. Many times the amount is high enough to put their load fee for class A shares at 2-2.5%, yet the advisor still puts them in F shares so they are charged every year rather than one time.