The Israel Securities Authority today announced reductions in the management and distribution fees for mutual funds. The distribution fees that mutual fund managers pay to banks will be reduced by 20%.
The distribution fees for money market funds will be reduced to 0.1% from 0.125%; the distribution fees for debt mutual funds will be cut to 0.2% from 0.25%, and the distribution fees for other mutual funds will be cut to 0.35% from 0.8% for equity funds and 0.4% for other funds.
The Securities Authority will require mutual managers to reduce their management fees because of the reduction in distribution fees, for a period of six months. At the end of this period, competition in the mutual funds industry is expected to establish management fees at a new equilibrium reflecting the changes in the fees.
The Securities Authority said that the reduction in fees had two additional purposes: the lifting of barriers from mutual fund management companies seeking to offer products with especially low management fees, and reducing the potential of conflict of interests of financial advisors, by setting uniform fees for equity and other mutual funds that are not debt funds.
Securities Authority chairman Shmuel Hauser said, "The time has come for the public to pay less, not just for cottage cheese and mobile services, but also for mutual funds bought on the capital market."
Published by Globes [online], Israel business news - www.globes-online.com - on July 3, 2012
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