@article {Haslem37, author = {John A. Haslem}, title = {The Total Expense Ratio: The Reality of Distribution Fees{\textemdash}{\textquotedblleft}Behind the Mutual Fund Curtain{\textquotedblright}}, volume = {21}, number = {3}, pages = {37--43}, year = {2018}, doi = {10.3905/jwm.2018.21.3.037}, publisher = {Institutional Investor Journals Umbrella}, abstract = {This study uses the portion of a new Total Expense Ratio construct that discloses the reality of adviser/distributor payments of hidden distribution fees to sales brokers {\textquotedblleft}behind the mutual fund curtain.{\textquotedblright} Distribution fees consist of dealer (broker) concessions, account servicing (12b-1 fees), types of revenue sharing payments, and soft-dollar trades. Distribution fees are one of four categories in the Total Expense Ratio, the others being (1) management fees, (2) {\textquotedblleft}other{\textquotedblright} expenses, and (3) transaction costs. Adoption of the complete Total Expense Ratio with normative transparency of disclosure followed by prohibition of 12b-1 fees, revenue sharing payments, and soft-dollar trading requires strong action by fund independent directors, the fund industry, and most importantly, by Congress and the SEC. Only a few fund advisers are likely to join in this effort to change their very profitable status quo. However, as the article maintains, fund shareholders deserve to receive their {\textquotedblleft}fiduciary protections{\textquotedblright} under the law and the TER may be useful in this regard.TOPICS: Mutual funds/passive investing/indexing, legal/regulatory/public policy}, issn = {1534-7524}, URL = {https://jwm.pm-research.com/content/21/3/37}, eprint = {https://jwm.pm-research.com/content/21/3/37.full.pdf}, journal = {The Journal of Wealth Management} }