I attended the ICI conference last week, and contrary to what you may have heard, it wasn't just two-and-a-half days of back-slapping and self-congratulatory statements. There was also some serious evasion of difficult questions. A couple of my favorites follow.
One person asked why fund companies are so reluctant to disclose managers' ownership interests in their own funds. It's a logical question; many managers tell us they won't invest in a company whose top executives lack significant ownership interests. To defend the fund industry, Jim Riepe of T. Rowe Price erected the usual Peter McNeeley-type straw man. He said that it would be unfair to require a 35-year-old muni-bond manager to put a lot of his personal resources into an obviously inappropriate investment for someone that age. A lot of fund companies must have 35-year-old muni managers, because that seems to be the 100th time I've heard that defense. This excuse doesn't hold water. Most investors wouldn't expect a young manager to put a lot of his or her own money into a muni fund. And at any rate, the fund companies could explain away this situation in a brief paragraph in each shareholder report.
A lot of investors would, however, like to know whether their stock-fund manager is taking the same risks and incurring the same costs as them. Some managers have no idea what their funds' expense ratios are, and many are oblivious to the amount of their capital-gains payouts. I suspect that managers with significant amounts of money in their own funds are more attentive to these issues.