I’m among other things a Registered Investment Advisor with 45 years of experience in managing money. My clients have a diverse portfolio of investments, and in some of my accounts, I use selected mutual funds. I will use a mutual fund if I want to have exposure to an asset class, rather than buying individual securities. As an example, I might want to have a small position in precious metals. It is more cost-effective and more diversified to buy a mutual fund than one or two shares of stocks.
For some of my 401K accounts, the employer plan offers mutual funds as the only investments, and that is a problem for my clients and me. The reason is that when one buys a mutual fund, the fund is currently required by the Securities And Exchange Commission (SEC) to send a prospectus disclosing the fund's investments, fees, and performance.
Don’t get me wrong. All of this data is important, but I don’t need all of the paper. At specific periods of the year, mostly calendar quarter ends, my mailman will deliver my mail in those large plastic bins for several days in a row. There is so much mail that even though the prospectuses are printed on thinner and thinner paper, in the aggregate all the paper is heavy stuff.
Many mutual funds are now being offered as a series, and all the funds in the series go into one prospectus. I have a client that invested in a family of mutual funds and received a prospectus the size of a small town phone book. He only has one investment, but yet he gets information on all the funds in the series. I don’t know how many trees get cut down to provide the information on over 7,250 mutual funds? With postage now at fifty cents for a first-class stamp, it is an added expense all shareholders have to pay. When you add to the mounds of paper for the annual reports and the proxy votes, even more paper is wasted.
Investors and investment advisors get quarterly reports of copies of Federal filings. All of this paper is hurting my mailperson’s back. Why is it when the fund makes all of its reports to the SEC, it is done electronically, yet the shareholders have to get reams of paper? For the most part, I’m the only one of my investors who reads these reports. Most clients can’t understand the legal jargon used in writing all this stuff, so they either toss it out, or like one of my clients, he stacks the reports up, convincing himself that he will read them someday.
Here is a question for you. How many trees are cut down a year to send out all of this investment paper? If you guessed over a million trees, you’re a winner, or perhaps a loser, because you have to do something with all that paper you get. The industry trade group, the Investment Company Institute (ICI), is supporting Securities and Exchange Commission (SEC) Rule 30e-3 to have as much as possible, all correspondence sent electronically. The ICI estimates that the cost savings to investors, who get charged for all of this paper and postage, would be at least $2 billion over a 10-year period.
Let me make this one point again: you as the investor pay the cost of sending out all that paper. Most of us already have a computer and we can already get all of that information online. When you work hard to save money, especially for retirement, every penny helps.
The tree and paper lobby, of course, is trying to get this provision killed. This is because they will lose millions in revenue from all the paper the mutual fund companies have to pay to print all that stuff they send you. Remember, they don't pay for it; you do, so take a stand.
Make your money work as hard as it can for you and call or write your Congressman and Senators and tell them to stop cutting down trees and save your money by supporting passage of Rule 30e-3.
Dan Perkins is an author of both thrillers and children’s books. He appears on over 1,100 radio stations. Mr. Perkins appears regularly on international TV talk shows, he is current events commentator for seven blogs, and a philanthropist with his foundation for American veterans, Songs and Stories for Soldiers, Inc. More information about him, his writings, and other works are available on his website, DanPerkins.guru. To read more of his reports — Click Here Now.
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