In one article, Kathleen Day explains that

"Mutual fund investors might not be surprised to learn that the companies that manage their funds actively lobby Congress and the states regarding regulation of their industry. But they may be startled to learn that these managers have lobbied hard over the past decade for policies that investor and consumer advocates say often run counter to the interests of average mutual fund shareholders.

"And what many investors surely do not realize is that they are footing much of the bill for the lobbying effort, industry critics say. In a sour addition to recent revelations of widespread misconduct in the $7.1 trillion industry by fund managers and brokerages, the fund industry has, among other causes, lobbied to keep proxy votes secret and has persuaded legislators in Maryland and Massachusetts to adopt a lenient definition of what makes a fund director independent.

"The Investment Company Institute, the lobbying group for mutual fund managers, says a portion of the $31 million it received last year in annual membership dues was billed to mutual fund shareholders, though it doesn't know the exact amount, according to spokesman John Collins.

Many fund managers charge shareholders at least half of the cost of ICI dues, with many others charging all of it to them, said C. Meyrick Payne of Management Practice Inc., a consulting firm that specializes in advising independent directors on mutual fund boards. Directors must approve fees and other expenses that are paid to fund managers out of shareholder money.

"We still live in a capitalist system," Payne said. "So if managers can make shareholders pay, they will."

"Few funds, however, tell shareholders they are paying, industry and government lawyers say. Most opt instead to include the charge in disclosure material under the general heading "other expenses," which is what large, well known fund complexes such as Fidelity and Putnam do.

"To Russel Kinnel, director of mutual fund analysis at Morningstar Inc., most of the ICI's efforts are geared toward helping portfolio managers, not shareholders.

A few pages later, Albert Crenshaw tells us about how mutual fund companies are charging investors marketing fees for closed funds--funds that don't need advertising because you can't even buy into them anymore!

"Last year S&P did a study of closed funds and the 12b-1 fees they charged. According to S&P, whose database includes more than 15,000 funds, as of Dec. 8, some 605 funds were closed, and of those, 153 with a total of 274 share classes were listed as charging an average 12b-1 fee of 0.64 percent of the fund's assets annually. Some 94 were charging the legal maximum of 1 percent.