C shares

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Jan 23, 2010 10:00 pm

The possible proposal to have all C shares act more like Am Fds C shares (revert to A after 8-10 years or so) seems to me to make some sense. Thoughts?

Jan 24, 2010 9:04 am

Good point. But if the smaller accts are "forgotten", they'll at least be A shares as they are ignored

Jan 24, 2010 2:06 pm

I haven't been in the industry long enough to know this...but how long do clients typically stay within the same fund family anyways?

Jan 24, 2010 2:19 pm

Buying one fund family is a bit of a dinasaur. That is why C shares or fees are so popular. 60% of all A shares are now bought load-waived.

Jan 25, 2010 11:25 am
newnew:

The possible proposal to have all C shares act more like Am Fds C shares (revert to A after 8-10 years or so) seems to me to make some sense. Thoughts?

 
Why would you use C shares and then use all American Funds??  Really, for me, the point of using C shares is to get the best mix of funds. 
 
I like certain funds from:
Franklin Templeton
PIMCO
First Eagle
IVY
and a few others for specific niches.  I will use certain American Funds on occasion, but primarily just their international focused funds.  And I actually like Fundamental Investors for Large cap domestic, but I honestly don't use it much anymore.
 
Jan 25, 2010 12:41 pm

You missed the point. It was about the Am Fds RULE, not the funds. (the rule of going to lower cost funds after 10 years- FINRA could go with this for EVERY fund family. Thoughts?)

Jan 25, 2010 2:37 pm
newnew:

The possible proposal to have all C shares act more like Am Fds C shares (revert to A after 8-10 years or so) seems to me to make some sense. Thoughts?


It is a nice rule in theory. But as someone already posted, Advisors will just move assets to a different fund company. Unless you are asking if all fund companies did this would it make sense. In that case "no" for the same reason...
 
If I am getting 1% on assets and in a year I will take a 75% hit(smaller clients cause the most problems and call the most) on my income, then I will find a new C share that works. That RULE would essentially force churning/fund flopping/switching every 8-10 years.
Jan 25, 2010 3:50 pm

Agreed, that's true. But at least only those with a servicing FA would pay; the orphans or the ignored would not pay full price once converted automatically to A or F. That part makes sense- they would not go on being Cshares for an extra few years with no service. And let's face it- there a lot of 15k-75k accounts just floating out there paying Cshares for nuttin'. No calls, etc. Their FA quit/died/got lazy/got rich/moved/got transfered/went indy

Jan 25, 2010 4:24 pm
newnew:

Agreed, that's true. But at least only those with a servicing FA would pay; the orphans or the ignored would not pay full price once converted automatically to A or F. That part makes sense- they would not go on being Cshares for an extra few years with no service. And let's face it- there a lot of 15k-75k accounts just floating out there paying Cshares for nuttin'. No calls, etc. Their FA quit/died/got lazy/got rich/moved/got transfered/went indy


Yeah but that exists for a share, b shares, c shares, SMA, Advisory, etc.... what you are looking for is an incentive for the advisor to take more care and that is impossible to incentivize on smaller accounts(which goes back to my saying accts under $50K shouldn't have an advisor)