Mutual fund sponsors exploit system, charging excessive fees as watchdogs fail.
Mutual fund sponsors may be charging higher advisory fees than they should, taking advantage of their control over the funds. Independent directors are supposed to make sure fees are fair, but many sponsors are still making big profits. Some sponsors use tricky methods to hide how much money they're making, which could lead to lower fees if they get caught. This study found that some fund complexes are definitely using unfair methods, and it's likely happening in other parts of the industry too.