As power shifts to the broker-dealers marketing mutual funds, industry executives are increasingly focused on trading costs and the need for greater oversight of traders by fund management. As a result, the Securities and Exchange Commission is preparing guidance for fund directors on evaluating portfolio trades, the importance of best execution and how to determine if commissions are reasonable.
The emphasis is moving from manufacturing to distribution as the mutual fund industry matures, growth slows and funds become ever-more reliant on fee-based broker-dealers to market their wares, said panelists at an April 17 meeting of the Mutual Fund Directors Forum in Washington, D.C. Brokers "know the clout they have, and have increasingly asked for more and more [fees] to get the product on the shelf," said Darlene DeRemer, founder of Grail Partners, a New York-based advisory merchant bank.
|
