What is a 12b-1 fee?
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David John Marotta
President, Marotta Wealth Management, Inc., Marotta Wealth Management, Inc.
http://www.emarotta.com
434-244-0000
questions@emarotta.com
David John Marotta is the President of Marotta Wealth Management, a fee-only financial planning and asset management firm in Charlottesville, Virginia. He is an oft-quoted writer and speaker on financial matters and his weekly financial column can be found at www.eMarotta.com
Transcripts
Host: What is a 12b-1 fee?
David Morotta: A 12b-1 fee was named after the section of the securities in exchange commissions, rulings that allow these kinds of fees. A 12b-1fee is intended to pay the advertising for a fund and there are two ways you can have advertising. If you have normal advertising 12b-1 fees of no load mutual funds have to be under 0.
25%, many of them are zero but some of them are as high as 0.
25%.
On a loaded fund this may include the sales charge in which case the advertising is considered 12b-1 fees plus all the salesman s time and everything else. Then the 12b-1 fee might be as high as 1% or so percent. So, we think it is best to invest in things with a low expense as possible. This helps your money double quicker and so we invest only in no load mutual funds.
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