John Freeman's Working Paper Responding to the Advisory Fee Analysis in AEI Working Paper #127, June 2006, 'Competition and Shareholder Fees in the Mutual Fund Industry: Evidence and Implications for Policy' by John C. Coates, IV, and R. Glenn Hubbard

Abstract

Professors John C. Coates, IV, and R. Glenn Hubbard have prepared a study entitled, Competition and Shareholder Fees in the Mutual Fund Industry: Evidence and Implications for Policy. I will refer to it henceforth as Coates-Hubbard. The working paper was published in June of 2006 under the auspices of the American Enterprise Institute. Coates-Hubbard joins with the Investment Company Institute in claiming that fees for mutual fund advisory services are not excessive and that findings to the contrary are based on faulty scholarship. In truth, as is explained below, it is the Coates-Hubbard scholarship that is defective, featuring conclusions that are unsupported and unsupportable.