The new DOL Fiduciary rule has barely gone into effect, and it is already starting to shake things up. One of the first changes we are starting to see is a new set of mutual fund share classes. American Funds and Franklin Templeton have already announced new share classes to help advisors deal with the new fiduciary rule. Rest assured, there will be more.
These new share classes are what some are calling “stripped down” share classes as they carry no sales load, no 12b-1 fees and no sub-TA fees. Bare bones. Absolutely no compensation from the fund to the distributor. It is up to the distributor to figure out how to charge their clients and in turn compensate the advisor.