Bogle Calls for Lower Fees
June 14, 1999
John Bogle, senior chairman of The Vanguard Group of Malvern, Pa., urged financial planners to encourage mutual fund companies to lower their fees. Bogle made his appeal June 4th at the annual meeting of the National Association of Personal Financial Advisors in Washington, D.C.
Fund costs have increased 40 percent since 1980, with the average expense ratio of an equity fund rising from 1.10 percent to 1.57 percent today, Bogle said. He criticized this trend, saying that the economies of scale now available should have reduced costs. Bogle said two of the reasons fees have increased are inflated marketing budgets and excessive turnover of holdings, said Bogle.
Bogle's great-grandfather, Philander Armstrong, gave a similar speech to insurance executives in 1885, Bogle told the financial advisors.