Finance, Forex and Investments

Are mutual funds required to disclose ALL fees they will charge in the prospectus?

I've reviewed the prospectus for American Funds Growth Fund of America. According to the prospectus they only charge a set up fee and annual fee of $10 for class A-529 accounts. I have a regular class A retirement account, but am being charged a $10 annual fee and was charged the $10 setup fee. I am positive this fee is not listed in the prospectus. Can mutual fund companies charge fees that are not disclosed? This is NOT a college account. It is a class A IRA.

Public Comments

1. The trustee for your retirement account may have fees beyond what would be shown on the prospectus. Many trustees have kept those fees hidden from their clients, but the gov't is passing laws so those fees are spelled out. If those fees are too much, either encourage your employer to look for a better plan, or if a personal IRA, you are free to move it to a different trustee (direct transfer is better than rollover). The trustee for my 401(k) does not charge any fees beyond the expense ratio of each fund (a percentage of assets). And my IRA trustee does not charge any fees for the particular mutual funds I hold there, although, they do get a small cut of the expense ratio spelled out when researching funds on their site. My IRA does have fees if a fund is sold before minimum holding period. Neither one charges any annual fees.
2. The fees are disclosed on the application and on page 4 in the program description. "You will be charged a $10 fee for opening an Account with CollegeAmerica as well as an annual $10 Account maintenance fee. In addition, you will be charged fees and expenses associated with the applicable American Funds share class." you can also find it on their website. http://www.americanfunds.com/college/college-america/faq.htm#fees