Products March 2, 2011

Motley Fool Unveils Equity Offering

Motley Fool Asset Management has launched the Motley Fool Great America Fund.
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The offering focuses on lightly-followed U.S. companies that may offer real value opportunities for patient, long-term stock investors, according to the company.

Advantages of the fund are reported to include:

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  • Fair, performance-based fees – Motley Fool Asset Management has a financial incentive to help investors do better than the market.  The “fulcrum fee” compensation model means that the fees are based on the performance of the fund.
  • Frank, friendly communications – Through monthly newsletters, and annual in-person investors meeting and twice yearly conference call forums, fund managers promise to talk to investors “frequently and frankly, in plain English, like a trusted partner.”
  • Unwavering temperament – Motley Fool Asset Management doesn’t get rattled in rocky waters or chase the latest Wall Street fad.
  • 21st century convenience – Motley Fool Asset Management aims to provide the most convenient investing process in the industry through a secure, interactive Web site.
Compliance March 2, 2011

Fiduciary Policy Should Not “Impede” Common Interactions

Paul Stevens, president of the Investment Company Institute (ICI), presented his organization’s statement to the Department of Labor (DoL).  
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Stevens said it is important for the DoL and the Employee Benefits Security Administration (EBSA) to consider the weight of having fiduciary status–“Fiduciary status entails one of the highest obligations, and also liabilities, known to the law. Fiduciary status underpins the entire ERISA compliance structure. Thus, rules governing who is a fiduciary need to provide clarity. They should not impede commonplace financial interactions. They must allow plans and retirement savers to obtain investments that meet their needs and gather a range of market input into their decision making process.”

The ICI recommended the following revisions to the proposed rule:

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  • Persons who deal with plans or IRA investors must know whether or not they are fiduciaries.
  • Fiduciary status should attach only to genuine advisory relationships where a position of trust and confidence exists.
  • Simply selling an investment product cannot be a fiduciary act. And,
  • The rule should not discourage the assistance that recordkeepers engaged to administer plan accounts provide to help fiduciaries prudently select and monitor plan menu investments.

It also suggested the following clarifications for the sales-exception provisions:

  • The exception is available to a broad range of sellers and agents. For example it should be available when a mutual fund is sold directly by the fund company or its affiliated distributor and when a fund is sold through a broker/dealer.
  • The exception should not require that a seller characterize itself as “adverse.” The sale of a mutual fund is not a zero-sum game where one side benefits only at the expense of the other side.

The complete statement can be seen here.

 

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