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This will be interesting to see what the investigation uncovers.
Quote:
The Labor Department is investigating Fidelity Investments over an obscure and confidential fee it imposes on some mutual funds, according to a person familiar with the inquiry.
The annual charge, which Fidelity calls an infrastructure fee, is aimed at companies selling shares on the asset manager’s fund platform, and was described in a 2017 internal Fidelity document reviewed by The Wall Street Journal. The fee, which appears to have been implemented in 2016, is “designed to ensure that each Fund Firm meets a minimum required payment to Fidelity.” By marking the charge as an infrastructure fee, the fund firms may be able to avoid disclosing it to investors.
The infrastructure fee appears to be a way for Fidelity to make up for revenue the firm has lost as a result of investors flocking to reduced-cost mutual funds, a situation the firm refers to in the document as “unsustainable economics.”