The Securities and Exchange Commission Investor Advisory Committee called on the full commission Thursday to mandate improvements in mutual fund disclosures.
One reform the panel is urging is for the SEC to require mutual funds to have standard fee disclosure of actual dollar costs on customer account statements.
“The goal should be to enhance investors’ understanding of the actual costs they bear when investing in mutual funds and the impact of those costs on total accumulations over the life of their investment,” the advisory group said in recommendations.
The committee noted many investors don’t have a good grasp of annual mutual fund fees or the long-term impact of fees on their portfolios.
Part of the problem is that the common way mutual funds disclose costs as a percentage of assets may lead investors to underestimate the impact of the fees on their portfolios, the group said.