12b-1 Mutual Fund Fees

                 

Most funds no longer charge 12b-1 mutual fund fees but the charges are still around. These were originally permitted by the SEC to allow the marketing expense for new investors. They represent a small sales load that adds up over the years.

                                           

The 12b-1 charges originally were used to pay fees for the distribution of funds by brokers. But they still persist even when brokers are not involved, but are still ostensibly used for sales and marketing efforts.

                       

Avoid mutual funds that charge them. Those fees become significant deductions from your accumulated holdings over the years.(See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)