Raising fees for small accounts is an obvious burden for investors who are struggling to scrape up money for their first investment stash. Such a move would flood the market with accounts bearing only a few hundred dollars apiece, far below the minimum investment most mutual funds need to break even. Md. To me, the big issue is not whether there will be private accounts, Bullard said. It will be whether they are one of the biggest investment rip-offs created. The SEC has to get on the ball and think about these problems.
All mutual funds charge a management expense.
The percentage fee is levied on all accounts - leading larger shareholders to pay more. Investors, who were notified of the fee in June, can avoid the charge either by depositing more money or by agreeing to conduct all transactions online. But a spokesman said the second-largest fund family might do a second sweep in December to identify accounts that had since slipped below the minimums. Vanguard also is an example of a company that rewards customers for saving more or consolidating accounts. In the past, some mutual funds actively wooed small investors, figuring they d gradually build up their accounts and become profitable customers.