Many years ago I started a mutual fund. I vowed it would be a true no-load fund. That meant not only would it not have front-end or back-end loads, but it would have no 12b-1 fees and not participate in any revenue-sharing arrangements.
Oh, how naïve I was back then, for I thought revenue-sharing merely went to pay the coffers of those itinerant salesmen who hawked your fund to the huddled masses. I wasn't looking to employ traveling or even sedentary (think "boiler-room") salesmen. Instead, I and my small band of gypsies would rely on our good looks, great service and word-of-mouth to distribute our friendly fund.
Then I learned the awful truth. Investors, long sold on the myth of diversifying by buying armloads of mutual funds, demand one-stop shopping. That meant they went to a clearinghouse (i.e., usually a discount broker) to hold their cornucopia of funds. I figured all I needed to do was get a CUSIP, a ticker, and a DTCC account. Then any broker could hold our fund.
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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).
