Let's get one thing out of the way at the outset. I've started mutual funds. I continue to run a family of mutual funds. The point isn't disclosure. The purpose of my mea culpa is to leave you with this thought: I know where the skeletons are buried.
When it comes to mutual fund expenses, believe it or not, there are good fees, bad fees and even a fee paradox. If you're a fiduciary or an investor trying to identify those mutual funds most suitable for your retirement plan, you better know the ins and outs of fees.
First, let's dispel a myth. Cheaper funds do not necessarily offer you the best investment. We all know that index funds have (or should have) the lowest expense ratio. We also know, despite the mantra often heard from index fund salesmen, academic studies have shown index funds do not consistently outperform active funds, sometimes for extended periods of time. As a fiduciary, you can't rely simply on the lowest price to protect you.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
