• Skip to primary navigation
  • Skip to main content
  • Skip to footer
Mullooly-Logo

Mullooly Asset Management

Fiduciary Fee-Only Financial Planner | Investment Advisor in Wall, NJ

  • Our Fees
  • About us
  • Schedule a Meeting

What Are 12b-1 Fees?

May 19, 2014 by Thomas Mullooly

 

We recently discussed different ways that investors can own mutual fund shares. Most mutual funds have A shares, B share, and C shares. We noted that B shares and C shares usually include 12b-1 fees. Many investors don’t know what these fees are or do but are confused by them. Tom takes a moment to briefly explain 12b-1 fees in this week’s video.

12b-1 fees were originally allowed by the Investment Company Act of 1940. The thought behind allowing them was that if mutual funds were able to advertise, they would be able to increase their assets. This would hypothetically lower the fund’s expenses. In 1980, mutual funds realized the rule allowed them to use 12b-1 fees to pay brokers as compensation for selling their mutual funds. Not exactly advertising.

In most Class B shares 12b-1 fees are around .25% per year. In your average Class C shares that fee is closer to 1% per year. If that doesn’t seem like much to you consider this: In 2009, mutual funds paid $9.5 billion in 12b-1 fees.

Investors should always know how their money is invested. If they don’t know, they should ask their investment advisor immediately.

You can learn more about 12b-1 fees by visiting the following link: http://www.morganlewis.com/pubs/IMFYI_MutualFundDistributionFees_01sept10.pdf

Never miss a post...and we deliver!

newsletter mailman

Get our updates delivered right to your inbox. Sign up today!

Success! Now go and check your email to confirm your subscription.

There was an error submitting your subscription. Please try again.

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit

Filed Under: Asset Management, Videos Tagged With: mutual funds

About Thomas Mullooly

Thomas Mullooly is owner and founder of Mullooly Asset Management, Inc. In 2002 Tom opened Mullooly Asset Management, a fee-only investment advisory firm. As an investment advisor, and not a broker, Tom works strictly for his clients. With the help of point and figure charting, Tom builds a realistic game plan for clients.

Footer

Mullooly-Logo

2052 NJ-35, Suite #203
Wall Township, NJ 07719
Phone: (732) 223-9000
Fax: (732) 223-9600
Email: support@mullooly.net

Form CRS

  • Privacy Policy
  • Disclosures and Legal Disclaimers

Useful Links

  • Contact Us
  • Client Login
  • Pay Bill Online
  • About us
  • Our Fees

The information on this website and blog do not involve the rendering of personalized investment advice. A professional advisor should be consulted before implementing any of the options presented. None of the content contained in this website should be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • YouTube

Resource Center

  • Videos
  • Podcasts
  • Blog

Copyright © 2021