You have read in these pages - and in the media generally - over the past few years about the changes that have occurred in the mutual fund industry. The final stage of the most recent round of changes has come to a conclusion, with the cost and performance disclosures you will see in your year-end statements from FundEX Investments Inc.
Much discussion has taken place around the subject of advice fees and the manner in which they are paid. The debate in large part revolves around having advice fees embedded in the overall cost of the fund or paid separately as a “fee for service”.
To this point, mutual fund business through Scrivens has been based on the “embedded commission” model. Through our Mutual Fund Dealership, FundEX Investments Inc., we are now able to offer a fee for service platform for mutual fund business.
First, it involves the use of the FundEX Nominee Name account platform. This platform allows for mutual funds from various companies to be included in one account. This improves efficiency and reduces paperwork.
If you would prefer to receive electronic as opposed to paper statements the annual fee would drop to $150.
Second, it involves the use of no load “F Class” mutual funds - funds where the Management Expense Ration (MER) reflects only the expenses for fund management - the advice portion fee has been stripped out.
We then complete a Fee for Service Account Addendum, where we specify the fee to be charged (such as a percentage of assets) and how it will be collected (charged to account assets or debited to your account).
The fee is charged only on the mutual fund assets held in F Class series. It does not apply to any other mutual funds retained in the account; those will continue to operate in the usual way.
Using a Fee For Service structure may be a more cost-effective way for you to conduct your mutual fund business - a discussion with your Scrivens advisor will help determine whether that is the case.
There is one further benefit on the product side: this structure will allow us to offer certain types of funds (such as many index-based mutual funds) we were previously unable to offer.
The bottom line is that we are now able to provide greater choice, both in advice as well as in product.
We look forward to discussing your individual situation and helping you get the most from your portfolio: 613-236-9101