In the Margins

12b-1 out of favor

April 22, 2016

By The Wall Street Journal

The 12b-1 fee is drawing scrutiny under the new Department of Labor fiduciary rule and appears to be losing favor. A common criticism of 12b-1 fees is that they can be overlooked or misunderstood by investors. Unlike commissions, they don’t appear on transaction confirmations, says Mercer Bullard, a securities law professor at the University of Mississippi School of Law. And “although they are charged continuously, shareholders never see the dollar amount they are paying or that is paid to their broker,” he says. Read the original story from The Wall Street Journal.