assessing the costs and benefits of brokers in the mutual strongfundstrong.pdf

Assessing the Costs and Benefits of Brokers in the Mutual * Fund Industry by Daniel Bergstresser1 2 3 , John Chalmers , and Peter Tufano Draft: September 26, 2007 Copyright ©2007 Daniel Bergstresser, John Chalmers and Peter Tufano * We have received very valuable guidance and comments from Sean Collins, Henrik Cronqvist, Ro Gutierrez, Charles Hadlock, Sarah Holden, Chris James, Woodrow Johnson, Wayne Mikkelson, Avi Nachmany, Kasturi Rangan, Brian Reid, Jon Reuter, Nancy Rose, seminar participants at the University of Arizona, Arizona State University, UC Berkeley, University of Cologne, Michigan State, Stanford, the University of Oregon / Journal of Financial Economics Conference on Delegated Portfolio Management, the ICI Academic/Practitioner Conference, the 2006 American Finance Association Meetings, and from staff members of the Investment Company Institute and National Quality Review, along with representatives of various fund companies. We thank Financial Research Corporation, Morningstar, and Strategic Insight for sharing data with us. The comments in this paper do not reflect the views of any of these organizations. We thank the Harvard Business School Division of Research, MIT and the University of Oregon for providing funding for this project. Prior versions of this paper were entitled “The Benefits of Brokers: A Preliminary Analysis of the Mutual Fund Industry.” Changes in the results in this 2007 version of the paper primarily reflect the extension of the data set from 2002 to 2004. 1 Corresponding author. Harvard Business School, Boston, MA, 02163, phone: 617-495-6169, fax: 617-495-6198, email: dbe