While the SEC does not limit the percentage of a sales load
fund may charge, the Financial Industry Regulatory Agency (FINRA) imposes limits on some fees.
CDSC evolved into a form of sales load
that enabled load fund marketers to have their cake and eat it too.
Shareholder fees are account fees, exchange fees, purchase fees, redemption fees, and sales loads
As sales loads
have declined, expenses charged to shareholders, as a proportion of assets (the expense ratio), has increased substantially, except in the case of tax-exempt bond funds (table 2).
They also argued that if mutual funds were permitted to use fund assets for distribution, instead of traditional front-end sales loads
, investors would benefit directly because funds could offer better and more attractive investment products.
Performance data used by Lipper would have been different, and rankings may have changed, had sales loads
The products offer low policy expenses, no surrender charges or sales loads
and full disclosure of all charges.
In contrast to traditional back-end sales loads
, contingent deferred sales charges usually apply only for the first few years that you own a fund; then they disappear.
The unit-linked policies are characterized by regular contributions spanning many years with relatively high sales loads
and surrender charges that are comparable to those of its competitors.
The growth of 12b-1 fees, which totaled $10 billion in 2004, reflects a shift by mutual funds and their investors away from front-end sales loads
to 12b-1 fees as a mechanism to compensate advisers and other intermediaries who provide assistance to shareholders.
If there were a [legitimate] market, it would be reached by full and fair disclosure of the redundancy by converting insurance charges from basis points into dollars and by truthful labeling of sales loads