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- Title
MUTUAL FUND ADVISORY FEES: AN OBJECTIVE FIDUCIARY STANDARD.
- Authors
Brown, Stewart L.
- Abstract
Mutual funds are structurally different from other corporations. The corporation or trust is controlled by an external entity: an investment management firm that profits from fees charged to manage the fund's portfolio. Recognizing this fundamental conflict of interest, in 1970 Congress made investment management firms fiduciaries with respect to fees charged their captive funds. In the nearly fifty years since then, the courts have interpreted their fiduciary duty so narrowly that no plaintiff has met the judicially established fiduciary standard. This paper presents and analyzes empirical evidence on advisory and sub-advisory fees and shows how the courts and the Securities and Exchange Commission can better enforce the fiduciary duty imposed on investment management firms.
- Subjects
UNITED States. Securities &; Exchange Commission; MUTUAL fund fees; INVESTMENT advisors; MUTUAL funds
- Publication
University of Pennsylvania Journal of Business Law, 2019, Vol 21, Issue 3, p477
- ISSN
1945-2934
- Publication type
Article