Yes, all those funds held on all those platforms were required to pay a fee to be placed on the shelf. Worse, those weren't one-time fees or even minimal monthly subscription fees. They were large (as in 35 basis points) asset-based fees. It was either that or each shareholder pays an outrageously large commission for even the smallest dividend reinvestment. (I opted out of the whole thing altogether.) 

By this time, I was well versed in the true cost of most financial operations. One of the biggest scams ever invented by this industry in which I reside is the idea of paying asset-based fees for transactions. It sounds cheaper and it even may be cheaper in some cases, but, over the long haul, with these fee arrangements the house always wins. Is it the investor's responsibility to know this, or is it the industry's responsibility to not exploit this? 

On the retail side, the phrase caveat emptor quickly comes to mind. These are people making decisions with their own money and then living with the consequences of those decisions. I'm all for educated people or forgiving those who are "fooled once," but I'm a little uncomfortable outright telling people how to live their lives because they might not make the right decision. 

If we've learned anything from history, we've learned the greatest mistakes can turn into the greatest discoveries (q.v., Columbus mistakenly thinking he'd discover a quick route to India only to discover a new world, or, just within the past century, the discovery of penicillin, as well as the invention of the slinky, silly putty, the pacemaker, the microwave, Corn Flakes, and, most famous of all, the Post-it Note). 

So, yes, let people make stupid mistakes, because today's stupid mistake is tomorrow's "must-have" product. 

But by playing with other peoples' money, that's where this whole "buyer beware" premise gets turned inside out. If you make a bad decision with other peoples' money, that's not only bad for them, chances are it's bad for you (see "12b-1 Fees/Revenue Sharing Add to 401k Plan Sponsor Fiduciary Liability Woes," FiduciaryNews.com, March 24, 2015). Some form of custodial fee makes sense, and that's what a platform really is. But, like I said before, I'm very familiar with where the cost of holding assets resides.

It may seem like a few basis points is reasonable, but like my grandfather once told me when I was convinced playing the "50 Cents Guess You Weight" game was great because it was so easy to win, "Ask the carny how much the prizes cost." I did and, when no one was looking, the carny whispered to me, "A penny." He was making 49 cents for every "loss." 

I ask you the same question. Think asset-based fees custody fees are cheap (and, no, I'm not alluding to the 35 basis points I was asked to pay, but the single digit basis points more often paid), then ask the custodian what their costs are. Ask them what it costs to hold a DTCC security. Ask whether the cost is based on the number of securities, not the amount of each security held.

In an electronic world, one share takes up as much room as a million shares. Dollars-to-donuts for every basis point you're paying, the custodian is paying a mere fraction of that. 

Now add those mutual fund revenue-sharing "pay-to-play" placement fees on top of that and you'll really start getting mad. 

Revenue-sharing, 12b-1 fees, and commissions are just the tip of the iceberg when it comes to questionable fee practices. What's needed isn't a fiduciary standard. What's needed is simply the elimination of conflict-of-interest fees.