The Dept. of Labor is investigating Fidelity for fees charged to some mutual funds. 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.
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Government Probes Fidelity Over Obscure Mutual-Fund Fees
Fidelity makes thousands of third-party mutual funds available to its customers, Vincent Loporchio, a Fidelity spokesman, said in a statement. Those customers include holders of 401(k) plans for which the firm acts as record-keeper. “We receive a fee from some of those mutual-fund companies to compensate us for maintaining the infrastructure that is needed to make those funds available,” Mr. Loporchio said, citing “systems and processes for record-keeping, trading and settlement, making available regulatory and other communications, and providing customer support online and through phone representatives. It is costly to maintain this kind of infrastructure and Fidelity is entitled to be compensated for those costs.”
