All of you are familiar with 12b-1 fees (being clients of mine). Last month, we sent an email to Kiplinger’s editor and the author of their article on how great American Funds are.  Our email complained that American Funds was essentially shifting $2.7-2.8B/yr from the investing public to the brokerage industry via their 12b-1 fees.

It could be that Kiplinger spoke with American Funds about the issue because this week American Funds released a new share class of their mutual funds called class F2. This is the only class of fund with no 12b-1 fee – and that is placed with clients with no commission/ load.  

We don’t know why American Funds suddenly implemented a new share class – other than coincidence – or that American Funds with their $1.1Trillion in assets were concerned about mighty Triangle Wealth Management (a little less than $1.1Trillion in client assets.  Tongue firmly in cheek). 

 
It’s a step in the right direction. A better move would have been to cut 12b-1 fees from all their share classes. If Vanguard, T. Rowe Price, and DFA can do it, why can’t American Funds ?