B and C share
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Not a frequent poster but I do read when things interest me. I'm curious to know if anyone is changing their stance on B and C share sales based on the recent lawsuits. Merril et al getting fined 40 million (And probably 80 million more in restitution to clients) makes me wonder if I shouldn't switch to more A share biz.
Just curious.
You should do what is in the best interest of the client. We are required to run NASD expense analyzer for most B and C share sales. My business in load funds is 60% A, 10% B, 30% C
Just use a wrap platform or a flat fee platform. You can get whatever fund is best for the client without a sales load.
All firms have probably already made whatever compliance/policy changes that are necessary to satisfy the NASD, including things like cost disclosures and limits on maximum B and/or C share holdings. The regulators raised these concerns quite a while ago. The fines against Merrill, LPL, Citigroup, American Express, etc. were for violations for a period ending a couple years ago.
So, I'm sure your b/d (assuming it's a quality one) already has the necessary policies/procedures in place to protect you & it re B or C share sales.
Franklin Funds doesn't even offer B shares any more. I suspect that other fund companies may take this route as well. As Duke says most firms have already reduced and are strictly monitor the amount of B shares you can sell.