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The Daily Brief

ICI Calls Out Broker Kickbacks for Delivery of Fund Reports

A fix is needed. | Purestock/Thinkstock


The fund industry isn't happy about broker delivery of fund reports. According to a new analysis by the Investment Company Institute, funds pay more than $100 million in fees each year to distribute shareholder reports to broker-held accounts; that's 120 percent more than the costs to deliver the reports to individual investors who own funds directly. Brokers are obligated to deliver shareholder materials provided by the fund, and the vast majority of them use one vendor to do so - Broadridge Financial Solutions. But this can lead to abusive practices, such as broker kickbacks. Brokers charge funds the maximum fee allowed under the NYSE rules, negotiate a lower fee with the vendor, and pocket the difference. "When brokers are able to negotiate a lower rate than the maximum, fund shareholders do not benefit," ICI said, in a statement. "Instead, Broadridge rebates the difference back to the broker." ICI wants the Securities and Exchange Commission to fix the fee structure. The regulator is also working on a rule to allow the e-delivery of shareholder reports, which could bring costs down, as long as third-party processing fees don't come into play.

Schwab Charitable Distributes $1.2 Billion

Giving it away, giving it away, giving it away now.


Schwab Charitable, an arm of Charles Schwab that provides donor-advised funds and other philanthropic services, reported that is distributed $1.2 billion in grants in 2016 to more than 56,000 charities. That's a 12 percent increase over the prior fiscal year and the second year in a row that grants topped $1 billion. "Despite a tumultuous year for stock markets and investments, donor-advised funds are proving to be a steady force in philanthropy, and we remain committed to providing our donors with simple, tax-smart and efficient solutions that help them give most effectively," said Kim Laughton, the president of Schwab Charitable, adding that 59 percent of contributions were non-cash investments or assets, which are not subject to capital gains tax when they are sold if held for a year or more. Schwab said this helps donors realize up to 20 percent in tax savings, allowing them to give even more. Schwab Charitable also eliminated basic consulting and processing fees to help maximize donations.

New Client Portal For NaviPlan

The latest version of NaviPlan, the financial planning tool from Advicent, now includes the Narrator Clients financial planning portal Advicent launched in June. Narrator Clients gives advisors a new way of viewing their financial plan results from NaviPlan, as well offer clients a interactive way to analyze the results and develop questions for the advisor. Advicent also updated the "Tracking Your Progress" presentation to include additional analysis for retirement, education, major purchase and emergency fund goals. There is also a new graph that shows clients how assets have changed in value since their last plan, a table to summarize all goals and the funding allocated towards them, and a "net worth timeline" to help track both individual goals and the entire financial plan.

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