Revenue Share: The Fund Industry's Dinosaur
Eventually, it will become extinct.
It’s Not Personal, Just Business
“Ameriprise Limits Sales of American Funds Products,” read Friday’s headline in the trade publication Ignites (the article is not linked because it is paywalled). Strange. I had not realized that American Funds’ performance was poor. Fund distributors, such as Ameriprise, conduct “robust due diligence” to ensure that their customers will be able to assemble a “broad, quality investment portfolio.” (Those quotes come from a 2017 Ameriprise release.) Did American Funds fail that test?
Silly me for thinking such a thing. It turns out that the decision was not about the investments. From the article: